Budapest, 16 October 2023 – Following the consultations with market participants, the Financial Stability Board of the MNB has finalised the conditions of the systemic risk buffer aiming at tackling the risks related to commercial real estate loans, which will enter into force on 1 July 2024. With a preventive aim, the measure strengthens the shock resistance of banks with commercial real estate financing project loan portfolios in a targeted manner.
In June 2023, the MNB decided on the preventive reactivation of the systemic risk buffer (SyRB), which was suspended at the outbreak of the coronavirus pandemic, due to special risks observed globally in the commercial real estate market. Following the consultations with banks, the Financial Stability Board has finalised the conditions of the SyRB application. Accordingly, the MNB will determine the level of the capital buffer ratio to be imposed on individual institutions based on the ratio of the targeted credit stocks of each institution to the Pillar I capital requirement, which captures the size and risk profile of the bank. The MNB will determine the specific, applicable final capital buffer rates in May 2024, based on the commercial real estate project loan portfolio of the institutions as of March 2024. The determined capital buffer requirements shall be fulfilled with Common Equity Tier 1 capital from 1 July 2024. The MNB intends to review the determined capital buffer rates annually.
Conditions for the determination of the systemic risk buffer
Further information on the applied systemic risk buffer
Magyar Nemzeti Bank