Budapest, 4 April 2019 – According to the MNB, the credit market is growing in a sound structure, therefore using a tool for mitigating systemwide overheatedness is still not justified. The level of cyclical systemic risks despite actual lending and real estate market trends is low; therefore, based on the Financial Stability Council decision, the 0-percent countercyclical capital buffer remains unchanged.
The Financial Stability Council (FSC) of the Magyar Nemzeti Bank (MNB) has decided to keep the countercyclical capital buffer rate applicable to domestic exposures at 0 percent. The Hungarian economy is in the ascending phase of the lending cycle, the net credit outflow cannot be considered excessive either overall or in its main segments. Although lending is expanding dynamically both in the retail and the corporate segments, overall, neither the speed of credit outflow, nor the volume of outstanding stock signals excessive lending. In a regional and EU-wide comparison, there is still room in Hungary for the expansion of sustainable lending and financial deepening; therefore, the FSC deems that the prescription of a countercyclical capital buffer is not yet timely.
The purpose of the countercyclical capital buffer is to increase the stability and resilience of the financial intermediary system across credit cycles. The MNB reviews the rate of the countercyclical capital buffer applicable for the Hungarian exposures quarterly, the rates for exposures in material third countries annually. No change is expected in the buffer rate over the forthcoming one-year horizon given the current trends, which may support the sustainable lending activity of credit institutions.
Magyar Nemzeti Bank