Budapest, 31 March 2021 – Based on the indicators examined by the MNB and in view of the complex economic situation caused by the coronavirus pandemic, the level of cyclical financial systemic risks is low. Therefore, the MNB's Financial Stability Board maintains the countercyclical capital buffer rate at 0 percent from 1 April 2021.
The Financial Stability Board (FSB) of the Magyar Nemzeti Bank (MNB) left the 0-percent countercyclical capital buffer rate applicable in case of domestic exposures unchanged. The main indicator on which the decision is based, the so-called credit-to-GDP gap is closing acceleratingly, i.e., the credit-to-GDP ratio has become faster in approaching its estimated equilibrium value. However, closure is explained by several transient processes that cannot be considered as a sign of overheating. On the one hand, due to the pandemic situation, the value of GDP decreased in 2020, which in itself has the effect of closing the gap. On the other hand, withheld payments due to the moratorium supported the maintenance of the loan portfolio. In addition, government and central bank programmes continued to play a key role in shaping the still significant new lending. Based on all this, domestic lending cannot be considered overheated. Overall, the set of overheating and vulnerability indicators of the cyclical systemic risk map of the MNB supplementing this indicator signals a low level of cyclical systemic risk, despite the persistence of lending activity and the cyclical shock resulting from the coronavirus pandemic. In view of all the above, initiating the build-up of the capital requirement is not justified, and no process indicating the need for intervention can be detected at present.
The spread of the global coronavirus pandemic and its first, second and currently emerging third wave have had severely negative economic and financial consequences. The emerging economic shock resulted in a significant contraction of GDP in 2020 also in Hungary and had a notable dampening effect on bank lending as well, which, in addition to the moderating impact of the payment moratorium on repayments, was maintained through significant central bank and government programmes (e.g., FGS, subsidised loans, guarantees). The past and expected future effects of the pandemic significantly affect the state and evolution of both the business and financial cycles. This also influences the indicators underlying the decisions related to the countercyclical capital buffer, and the decisions on setting the rate. As a result, the determination of the effective capital requirement and the build-up of the capital buffer may start later.
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 quarterly in case of Hungarian exposures.
Magyar Nemzeti Bank