Objectives and Responsibilities of the Financial Stability Board

The objective of the Financial Stability Board (hereinafter referred to as „FSB”) is to ensure harmony between micro-prudential regulatory supervision of the individual risks of institutions operating in the financial intermediation system on the one hand and macro-prudential regulatory oversight, which monitors systemic risks posing a threat to the entire financial system, on the other.

The FSB is a consultation body consisting of the President of the Hungarian Financial Supervisory Authority (hereinafter referred to as „HFSA”), the Governor of the Hungarian National Bank (hereinafter referred to as „HNB”), and the minister in charge of the money, capital and insurance markets (currently the Minister for National Economy).

In the interests of ensuring the stability of the financial intermediation system as a whole, it distributes information and consults on the strategic, regulatory, risk-related and other theoretical issues affecting the entire financial system and issues opinions if necessary. Opinions of the FSB affecting the stability of the entire financial system shall be adopted unanimously.

As necessary, the FSB shall place on its agenda the recommendations, opinions, risk warnings of the European Systemic Risk Board which are relevant for the Hungarian financial system and shall debate any possible need for actions stemming therefrom.

The organizations represented in the FSB shall discharge their responsibilities and obligations in accordance with the relevant acts and under no circumstances shall their representation in the FSB result in any infringement on their rights and obligations as stated by law.

The FSB shall:

• continuously monitor the stability of the entire domestic financial system and of the financial markets, in the interests of financial stability objectives,

• quantify the risk factors generated by general financial trends which potentially threaten the entire system,

• analyze the risks related to certain institutions or specific types of products and the spread of such risks, which may represent a threat to the entire system,

• follow the developments on international and European markets and emerging risks, which may represent a threat to the Hungarian financial system as a whole, and discuss any possible need for action,

• if necessary, submit recommendations to the Government for the enactment of legislation or the initiation of such, or to members of the Government for the enactment of legislation.

Operation of the FSB

Chairmanship of the FSB shall rotate annually between the minister in charge of the money, capital and insurance markets, the President of the HFSA and the Governor of the HNB.

The three organizations represented in the FSB shall carry out their work on the basis of full equality, with all due respect to their responsibilities and spheres of competence defined by law.

The FSB shall hold its meetings as necessary, but at least once every three months. Meetings of the FSB shall be convened by its Chairperson. At the request of any member of the FSB, a meeting must be convened within five working days.

The HFSA is responsible for attending to the secretarial duties related to the operation of the FSB.

The FSB shall operate in accordance with the rules of procedure it establishes itself.

The Secretariat of the FSB can be contacted by email: pst@pszaf.hu