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Banks appeal to govt for cooperation, call for end to criticism

History

The Hungarian Banking Association said in a statement on Tuesday that banks are ready to help dampen the effects of the crisis on clients, but called for cooperation with the government and rejected criticism of the sector.

Hungarian banks are open to looking for any such solution that serves to reduce the effects of the crisis on retail and corporate clients, but this aim can only be successfully achieved if there is cooperation between the government and the system of financial intermediaries, the association said. Hungarian banks reject the categorical qualification that "the Hungarian banking system is not good" as this opinion is not professionally established and not factual, it added.

The association noted that foreign parents of Hungarian banks had demonstrated their commitment to units in the country in spite of a drop of liquidity in the European financial intermediary system because of the crisis by reinvesting profits, maintaining refinancing support and raising capital.

Euro area countries and banks are facing new shocks, but the impact of this on the Hungarian financial intermediary system is minimal while members of the Hungarian banking system are taxed way above the European average, the statement said.

Hungarian banks will stick to the letter of the law in all cases, even if the law is unexpected or drafted without negotiations and professional consultations, the association said. Banks will help clients to the best of their ability even if they are of the opinion that it creates incalculable risks, even losses, for both the economy and the broader range of clients in the mid-term, it added.

Hungarian banks have and are taking measures to restructure retail loans as well as to strengthen the SME sector, the association said. Banks have also initiated talks on tailoring individual solutions to the problems of local council debt, it added.

Hungarian banks have had to pay a bank levy since 2010 and the government recently introduced an early foreign currency-denominated mortgage repayment scheme that requires banks to shoulder the cost of a discounted exchange rate.

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