MAGYAR NEMZETI BANK
organisation of external counselling events and – in view of the worsening pandemic – it reintroduced the extraordinary measures from 30 November 2020. In the aforementioned periods and at present as well, the advisers receive queries exclusively by phone, electronically or by post. In 2020, the experts handled more than 23,000 queries from customers and held external counselling events on more than 200 occasions.
Sponsoring In addition, within the constraints of available resources, the MNB participated, via strategic agreements or adhoc grants, in value creation, the preservation of national values, intellectual and cultural heritage (e.g. Andrássy Gyula Foundation, Virtuózok Hungary Nonprofit Kft.) and supported scientific activities and financial literacy (e.g. Hungarian Economic Association, Polgári Szemle Foundation). It contributed to improving the quality of life and equal opportunities of disadvantaged groups and to alleviating the difficulties arising from extraordinary life situations, which were often related to the coronavirus pandemic, with charitable grants (e.g. Hungarian Interchurch Aid, Hungarian Charity Service of the Order of Malta).
3.10 THE MNB’S ENVIRONMENTAL SUSTAINABILITY ACTIVITY In 2020, within the framework of its Green Programme launched in 2019, the central bank took further steps to reduce the risks associated with climate change and other environmental problems and to expand green financial services in Hungary. The MNB has been active in all three pillars of the Green Programme, i.e. in activities targeting 1) the financial sector, 2) the development of its own social and international relations, and 3) the further ‘greening’ of its operational activities. In connection with its operational activities, the MNB has developed an environment protection strategy for the period 2020-2022 to continue reducing its own ecological footprint. To further green its own operations (Pillar 3 of the Green Programme), it has decided to make ambitious carbon footprint reductions, while since 2021, it has been fully offsetting its carbon dioxide emissions with a habitat restoration project.
The MNB’s Green Programme In the first pillar of the Green Programme, the central bank wishes to strengthen the integration of environmental considerations into the financial system via ecological and environmental risk analyses – such as climate stress testing – and incentives to support financing, among other
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things. Due to the increased borrowing uncertainty caused by the pandemic, the terms of the green housing capital requirement allowance announced at the end of 2019 were modified, and thus the central bank decided to ease the programme. As a result, the capital requirement allowance has been extended by one year, until the end of 2024. In addition to the existing interest allowance, the allowance can now also be ‘passed on’ to clients in the form of fees linked to loans. In 2020 H2, the MNB also announced a capital requirement allowance programme for green corporate and municipal lending. As part of this, it waives some or all of the capital requirements for corporate and municipal exposures in a given year under Pillar 2 of the capital regulation, if the investment concerns the financing of renewable energy production and the purchase of green bonds by banks. Later, the allowance is expected to be extended to other ‘green’ credit purposes as well. One notable development for both the domestic corporate bond market and green finance is that the first domestic green corporate bond issuance under the BGS took place in the summer of 2020. Green corporate bonds account for more than 10 per cent of the MNB’s corporate bond holdings purchased under the BGS. However, without the incentive and supportive actions of the central bank and other regulators, it is unlikely that the issuance of corporate, bank and possibly municipal green bonds can proceed to the desired extent at the beginning, and thus the MNB is constantly looking for ways to stimulate the market in order to improve the financing conditions for green investments through those actions. In September 2020, the MNB published an analysis on the ideas, entitled ‘Opportunities for jump-starting the Green Bond Market in Hungary’. In autumn 2020, with the support of the European Commission’s Structural Reform Support Service, in cooperation with the EBRD and a domestic consultancy firm, the National Sustainable Capital Markets Strategy was launched as a work programme, by way of which the central bank intends to identify further green capital market development opportunities. In the spirit of strengthening the green capital market, the MNB considers it important to expand the green mortgage bond market and, through this, to encourage green mortgage lending. To this end, the Monetary Council decided in November 2020 to further develop the mortgage bond purchase programme which was relaunched in April 2020. In line with the decision, in the future the central bank will purchase green mortgage bonds that support environmental sustainability and prioritise financing for
