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Hungarian regulator launches new ratio to curb risky funding for banks

The Hungarian central bank will introduce an interbank funding ratio, a new macroprudential measure aimed at limiting the banking sector's reliance on funding from financial corporations and eliminating related systemic risks.

The ratio, to be implemented July 1, limits funds from financial corporations, weighted according to currency and residual maturity. It will take into account all funding received from financial corporations, but some exceptions will be granted to ensure that the requirement does not affect normal banking operations, the Magyar Nemzeti Bank said.

With the upper limit set at 30%, the ratio will not require adjustments from the majority of banks operating in Hungary, but it will prevent the build-up of excessive reliance on wholesale funding, the central bank said.