Budapest, 31 December 2024 – As of 1 July 2025, the MNB has set the Countercyclical Capital Buffer (CCyB) rate applicable to domestic exposures at the 1 percent level required in a neutral risk environment, and will not change it as of 1 January 2026, given the low cyclical risk level measured based on the analytical methodology renewed in December 2024. In addition, the central bank has also decided to apply CCyB rates corresponding to the decisions for 2025 of authorities in third countries that are material for the domestic banking system, highlighting for the institutions concerned the need of proper fulfilment of the obligation to closely monitor, report and calculate institution-specific capital buffers related to these decisions.
As of 1 July 2024, the MNB has increased the countercyclical capital buffer (CCyB) rate applicable to domestic exposures from 0 to 0.5 percent. In addition, the MNB has decided to apply a 1 percent positive neutral CCyB rate to domestic exposures in a neutral risk environment that is not characterized by overheatedness or cyclical risks, starting from 1 July 2025.
From the fourth quarter of 2024, the MNB makes decisions on the applicable CCyB rate based on a renewed methodology. As part of this, it has expanded and restructured the so-called Cyclical Systemic Risk Map (CSRM) used to monitor cyclical risks and containing additional indicators. It has also developed a so-called Cyclical Systemic Risk Index (CSRI) to aggregate and transparently communicate the risk signals of the monitored CSRM indicators. In the future, these two instruments, which are publicly available in terms of their time series and details, will form the basis for determining the benchmark CCyB rate dependent on cyclical risks.
Recently, domestic cyclical systemic risks have remained low despite the gradual recovery in lending activity. Based on the data for the second quarter of 2024, the CSRI indicates a low, neutral level of risks, which is also confirmed by other CSRM indicators: risks are low in most observed categories, while the level of risks is stagnant in the categories of credit institution competition measuring potentially excessive risk-taking and collateral encumbrance. This is mainly related to the still substantial overvaluation in the housing market and the increased interest income of the banking system, but it does not currently represent an excessive level of systemic risk requiring direct intervention. Looking ahead, a gradual improvement in the macroeconomic environment, an increase in real wages, a recovery in the credit and housing markets, and an increasing search for yield by households are expected to lead to a gradual increase in cyclical systemic risks; however, this will not require cyclical intervention for a substantial time period.
In view of all this, the MNB maintains the CCyB rate of 1 percent applicable from 1 July 2025 as of 1 January 2026.
The MNB is also obliged to assess on an annual basis the cyclical systemic risks of third countries (currently Albania, Montenegro, Russia, Serbia, Ukraine and Uzbekistan) that are material for the domestic banking system. In agreement with the self-assessment of the authorities of these countries of the cyclical systemic risk for their own jurisdiction, it is currently not justified to require rates that differ from the applicable CCyB rates applied by the relevant authorities for exposures in these countries. Accordingly, domestic banks must calculate their institution-specific CCyB rates and maintain their capital buffers taking into account the CCyB rates established by the authorities of these countries. In Albania, a CCyB rate of 0.25 percent will apply from 30 June 2025; in Montenegro, 0.5 percent will apply from 1 April 2025; in Russia, 0.25 percent will apply from 1 February 2025, then 0.5 percent from 1 July 2025; and in the remaining three countries (Serbia, Ukraine and Uzbekistan) a CCyB rate of 0 percent will continue to apply from 1 January 2025 for exposures in these countries. The MNB highlights the need for institutions required to build up a capital buffer to closely monitor the CCyB rate decisions of material third countries in order to calculate the capital buffer accurately and in accordance with the legislation.
The MNB shall determine the applicable CCyB rate on a quarterly basis, considering the positive neutral CCyB rate, the development of cyclical systemic risks arising from credit market overheatedness and all other relevant factors. The MNB shall determine the list of material third countries in the second quarter of each year and the applicable rates in the fourth quarter of each year.
Information on the countercyclical capital buffer and other information related to its operation
The indicator set of the Cyclical Systemic Risk Map
Magyar Nemzeti Bank