Review of the MNB’s performance in 2020
standards based on the powers conferred upon the European Banking Authority (EBA) by the European Union’s regulatory package, in the Subgroup on Resolution Planning Preparedness (SGRPP) and in the Subgroup on Resolution Execution (SGRE) dealing with regulatory issues arising during the practical implementation of resolution tools. With respect to the drafting of the European Union regulation on the resolution regulation of central counterparties, the consultations between the institutions empowered to adopt EU legislation continued in 2020, and the outlines of the concept for the establishment of the resolution framework for insurers also took shape. As part of this, the MNB assisted the relevant working group of the European Securities and Markets Authority (ESMA) with its comments and also contributed to the work of the European Insurance and Occupational Pensions Authority (EIOPA) on the future establishment of the resolution framework for insurers.
The MNB’s resolution tasks related to institutions strengthening the financial stability safety net
3.5 PAYMENT AND SECURITIES SETTLEMENT SYSTEMS The instant payment system was launched successfully on 2 March 2020, and the service became available to all Hungarian bank customers. With respect to system participants’ transition, no central intervention was required, and the individual errors on the banks’ side were also quickly resolved by the players affected. Accordingly, outages were only temporarily and limited to a small extent at certain institutions. The system has been operating adequately since then: transactions are sent and received in accordance with the rules, and only ad-hoc disruptions affecting few customers and not materially influencing fundamental operations are observed on banks’ side. The central infrastructure has been functioning without problems and outages since its launch. Regarding payments, the MNB formulated a proposal to slow down the spread of coronavirus, to facilitate the rapid containment of the pandemic and thus to mitigate the negative economic effects.
The financial stability safety net is strengthened by the fact that – thanks to the annual ex ante contributions of the member institutions – the coverage level of the Resolution Fund is increasing as scheduled, for the purpose of reaching the target level specified in the Resolution Act.35 Thus, by 31 December 2024 the available financial means of the Resolution Fund are to reach at least one per cent of the amount of covered deposits of all credit institutions authorised in Hungary. To achieve this, the MNB calculated the amount of the annual ex ante contributions for 2020 for all member institutions based on the methodology stipulated in the European Union regulation. The MNB’s representatives continued to actively participate in the work of the boards of directors of the Resolution Fund and the National Deposit Insurance Fund.
Consistent with the final deadline published by the European Banking Authority (EBA) in 2019, the MNB allowed additional time to account-keeping payment service providers until 14 September 2020, or until 31 December 2020 for those who submitted special requests, for the smooth introduction of strong customer authentication fully compliant with legal stipulations regarding online payments initiated with payment cards.
The majority of the claims and properties managed by MSZVK Magyar Szanálási Vagyonkezelő Zrt. (MSZVK Zrt.) and its subsidiaries were sold by July 2018. Based on the proposal by MSZVK Zrt.’s Board, the MNB, exercising its ownership rights, updated the medium-term business plan of the MSZVK group, according to which sufficient funds are available to the group for its continued operation until 2024.
Efficiency and security of Hungarian financial infrastructures and payments
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Based on the requests by payment service providers and other companies, the MNB published 27 legal interpretations and professional opinions on payments in 2020, of which 11 legal interpretations pertained to instant payments. In 2020, the MNB launched 34 inspection procedures on payments.
Implementation of the instant payment system On 2 March 2020, the instant payment system was successfully launched, following the comprehensive preparation of the service for the go-live vis-à-vis
ct XXXVII of 2014 on the Further Development of the System of Institutions Strengthening the Security of the Individual Players of the Financial A Intermediary System
ANNUAL REPORT • 2020
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