Banking Association: Quaestor clients should receive no compensation

History

The Hungarian Banking Association believes that clients of failed brokerage Quaestor should not receive any compensation, given that Quaestor clearly informed its clients that its securities – which paid a yield well over that of government securities – were covered neither by the National Deposit Insurance Association (OBA) nor the Investor Protection Fund (Beva), chief secretary Levente Kovács said on public radio on Monday.

"I donʼt think itʼs ethical for somebody to ask to be compensated if that person wasnʼt insured," he said, adding that the Constitution appears to support the Banking Associationʼs stand on the matter.

On April 14, the Hungarian parliament approved a bill in an expedited procedure – 185 voting in favor and 5 voting against – to establish a top-up fund to compensate investors of failed brokerage Quaestor. OTP Bank chairman-CEO Sándor Csányi told the press following an annual general meeting of the lenderʼs shareholders on Friday that the fund’s legislation may not pass the scrutiny of the Constitutional Court.

In a statement released later today, ruling Fidesz said the compensation of Quaestor clients would pose only a temporary burden for the financial sector, Hungarian news agency MTI reported. The compensation is an "advance" that banks will get back from seized assets, the party explained, the news agency added.

"For the first time since the change of system, victims of the most recent financial fraud – the Buda-Cash, Hungaria and Quaestor affairs – are getting compensation thanks to the decisions of the Parliament and the government on the new investor protection system," according to the statement.

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