The Agency and the Central Bank of Hungary signed a Memorandum of Understanding
As part of the state visit of President Kassym-Jomart Tokayev to Hungary, a Memorandum of Understanding (MoU) in the field of banking was signed between the The Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market (hereinafter - Agency) and the Central Bank of Hungary (Magyar Nemzeti Bank - MNB).
The ceremonial signing took place on November 20 this year in the presence of the leadership of both countries. The MoU aims to ensure effective cross-border supervision of banks in line with Basel Committee standards, thereby enhancing cooperation and interaction between the Agency and the Central Bank of Hungary (MNB) in the banking sector.
On November 21, the Chairperson of the Agency, Madina Abylkassymova, participated in The Budapest Eurasia Forum 2024, organized by the Central Bank of Hungary (MNB). The event brought together Hungarian Prime Minister Viktor Orbán, the Governor of the Central Bank of Hungary, representatives of the Hungarian government, the leadership of the National Bank of Kazakhstan, the Asian Infrastructure Investment Bank, research institutions, and international organizations.
Key topics of the forum included the development of the financial system amid digital transformation, globalization, and declining global economic competitiveness, sustainable growth in the context of escalating geopolitical risks, climate change and financial innovations, as well as strengthening multilateral cooperation and increasing investments in human capital.
In her opening remarks, Madina Abylkassymova congratulated the Central Bank of Hungary (MNB) on its 100th anniversary and highlighted the crucial role of the financial regulator in establishing a stable and sustainable financial system that supports Hungary's economic growth and enhances the well-being of its citizens.
The Chairperson of the Agency underscored the steady expansion of trade, economic, and investment cooperation, as well as cultural and humanitarian ties between Kazakhstan and Hungary. This progress is evidenced by the signing of new agreements during the state visit, including the establishment of a multimodal cargo terminal in Budapest and the launch of joint investment projects in areas such as the oil and gas industry, renewable energy, agriculture, and logistics.
Madina Abylkassymova emphasized Kazakhstan's strategic geographic location and leading position in Central Asia, which enables the country to significantly contribute to boosting trade flows between Europe and Asia, and to fostering the free movement of capital and investments across the Eurasian continent. With a stable and resilient economy growing at a rate of 4%, Kazakhstan accounts for about 60% of Central Asia's GDP and 85% of all continental traffic between Europe and China.
The Chairperson also highlighted Kazakhstan's pioneering role in advancing the climate agenda, adopting a Carbon Neutrality Strategy by 2060, achieving a 50% share of renewable energy in the country's total energy consumption by 2050, and implementing a green taxonomy for project financing. Kazakhstan was among the first to introduce mandatory ESG risk disclosures for banks, along with guidelines on managing environmental and social risks for financial institutions. Next year, the carbon footprint of banks' credit portfolios will be assessed.
During her speech, the Chairperson identified macroeconomic stability as a critical challenge for the global economy, given the rising macroeconomic imbalances, high inflation, elevated interest rates, and declining household incomes.
Key priorities include ensuring price stability, closely coordinating fiscal and monetary policies, maintaining low external debt levels, and building fiscal buffers to mitigate future crises. Additionally, she stressed the importance of enhancing economic competitiveness through structural and institutional reforms aligned with OECD standards.
Another significant trend discussed was the rapid advancement of financial technologies and innovations, which enhance financial inclusion and competition in the financial market. However, they also pose risks to consumer interests, data protection, cybersecurity, and the stability of the financial system. To mitigate these risks, Kazakhstan has developed a National Digitalization Strategy and a central bank digital agenda, which include the introduction of the digital tenge, digital financial infrastructure, AI- and machine-learning-based supervisory technologies (SupTech and RegTech), and the application of open banking technologies. Measures to protect information systems and data include stricter cybersecurity requirements for financial institutions, biometric verification, and the creation of centralized anti-fraud centers.
The Chairperson noted the challenges in financial regulation posed by the proliferation of digital assets and cryptocurrencies, the adoption of distributed ledger technologies, and the increasing risks of fraud and regulatory gaps between traditional and innovative market participants. She emphasized the need for a new approach aimed at preventing regulatory arbitrage and ensuring risk-sensitive regulation based on the principles of proportionality.
As part of the forum, the Agency's delegation also held meetings with the leadership of Hungary's two largest commercial banks – OTP Bank and MBH Bank. The parties agreed to maintain regular mutual contacts to explore opportunities for expanding cooperation in the banking sector.
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