The LCR is a measure of the stock of unencumbered, high quality liquid assets that can be converted easily and immediately in private markets into cash to meet banksʼ liquidity needs for a 30-day liquidity stress scenario.

European Union legislation sets the minimum LCR at 60% from October 1, 2015, but the rules will raise the threshold gradually to 100% by the start of 2018.

The MNB announced in June its intention to raise the LCR ahead of schedule, with the aim of bringing it to 100% “as early as possible, in 2016”.

In bringing forward the deadline for full compliance with the LCR rule, Hungary joins other EU member states such as the U.K. and the Netherlands, the MNB said today.

In parallel to the implementation of the LCR, the balance sheet coverage ratio and the deposit coverage ratio, currently in effect for dealing with the short-term liquidity position of credit institutions, will cease to function and be phased out from January 1, 2016.

An MNB decree on the measure is expected to be published in the official gazette Magyar Közlöny in September.