Systemic level impacts of Basel III on Hungary and Europe

Based on data available in the autumn of 2010, this paper describes the impacts which the most significant elements of the Basel III standards – that is, the new capital and liquidity requirements - are expected to have on the domestic and European banking system. Overall, we do not expect the new regulations to exert any significant direct effects on the Hungarian banking system. Nevertheless, some decline in GDP growth at the national level cannot be ruled out, to a lesser extent due to movements in the European money and capital markets, and to a greater extent due to impacts directly through parent banks. It is important to stress that calculations used as the basis for the industry and regulatory conclusions presented in this paper are relevant to a specific date and rely on different regulatory packages. Therefore, a repeated review of the regulatory package will have to be carried out prior to its implementation.Basel III, quantitative impact study, capital, liquidity, Europe, Hungary

Risk and regulation of financial groups and conglomerates

Recent financial market trends, such as convergence and the spread of conglomerates have changed the nature and structure of the financial sector’s risk profile. The paper investigates this issue from a regulatory policy aspect. Regulatory failures in the 1990s (BCCI, Barings) and the development of the market demonstrate that even „best regulatory practice” does not fulfil the requirements of transparency and efficiency. We investigate the improvement of prudential legislation for financial groups on the example of EU legislation, summarize recommendations made by international forums, and present existing regulatory frameworks in certain countries. In the light of these we address major lacuna in the relevant Hungarian legislation, even going beyond requirements in the field of EU harmonization.financial convergence, financial conglomerates, prudential regulation, European Union, Hungary.

Studies On The Potential Impacts Of The New Basel Capital Accord

In April 2003, the Basel Committee on Banking Supervision published the third consultative paper (CP3) of the new Basel Capital Accord relating to the prudential regulation of banks, which was followed in July 2003 by the EU Commission’s draft directive with the same contents, but slightly different detailed rules (Capital Adequacy Directive, CAD3). During the consultative process both organisations expect comments from the players affected by the new capital regulation, thus from the central banks of each country as well. The significance of the new capital regulation is underlined by the fact that the Basel recommendation will soon be followed by the European Union’s directive (presumably in 2004), the implementation of which will be one of the largest regulative challenges for Hungary. Accordingly, the Magyar Nemzeti Bank pays special attention to preparing the implementation of the Basel II/CAD3 capital accords, laying the groundwork for the adaptation and carrying out the necessary background analyses. Our main objective in the first phase of this rather complex and far-reaching project was – through participation in the legislative process – to analyse the issues important and relevant for the MNB, as well as to assess the potential consequences of implementation in Hungary. During such analyses we focused on the macro-prudential consequences. Accordingly, we carried out a detailed assessment of five topics.Basel Capital Accord, Pro-cyclicality, Credit risk, Market Risk, Regulation, Corporate governance.

A pénz jövője - digitális jegybankpénz: az MNB a legaktívabb jegybankok között = The future of money - Central Bank Digital Currency: MNB among the most active central banks

Napjaink meghatározó trendje a pénzügyek digitalizációja, mely a jegybankokat sem kerülheti el, ezért a központi bankok világszerte aktívan foglalkoznak a digitális jegybakpénz kérdéskörével. A tanulmányban áttekintjük a digitális jegybankpénz (CBDC) koncepcióját, részletesen bemutatva a legfontosabb lehetséges nemzetközi és hazai célokat, amelyek a CBDC bevezetését indokolhatnák. Röviden ismertetjük a világ három nagy gazdasági erőközpontjának CBDC tevékenységét, majd betekintést nyújtunk az MNB – nemzetközi viszonylatban is egyedülálló – digitális jegybakpénz megközelítésébe, valamint ismertetjük a kapcsolódó retail és wholesale kísérleti projekteket, többek között a Diákszéfet, amely az első nyilvánosan elérhető CBDC pilot projekt az Európai Unióban. | The digitalisation of finance is a major trend today, and central banks are actively addressing the issue of central bank digital currency. In this paper we review the concept of central bank digital currency (CBDC), detailing the main potential international and domestic objectives that could justify the introduction of CBDC. We briefly describe the CBDC activities of the world's three major economic powerhouses, then provide an insight into the MNB's unique approach to CBDC, and describe related retail and wholesale pilot projects, including the Student Safe, the first publicly available CBDC pilot project in the European Union