EBRD, Hungarian govʼt to set up working group

History

The European Bank for Reconstruction and Development (EBRD) and the Hungarian authorities have agreed to set up a working group to analyze the impact on the banking sector of a recent amendment to the Judicial Enforcement Act, the organization said on Monday, according to state news agency MTI. 

The EBRD said it is committed to continuing its fruitful cooperation with the Hungarian authorities and institutions such as the National Bank of Hungary (MNB) and the Hungarian Banking Association, and the working group will work to identify ways to mitigate any potential adverse consequences of the amendment, MTI reported.

At the start of March, Hungaryʼs Parliament approved amendments ensuring repossessed homes are offered at their full market value during the first year after foreclosure. If a repossessed home remains unsold after one year, the legislation lowers the threshold to 90% of market value. Earlier, repossessed homes could be sold for 70% of market value, the news agency noted.   

The EBRD noted that the Hungarian government signed a Memorandum of Understanding in February 2015 aimed at strengthening the countryʼs financial sector, improving its level of efficiency and profitability as well as boosting lending.   

Under the memorandum, the government pledged to "promote a stable and predictable framework to support macroeconomic stability." The successful implementation of the memorandum had positive impacts on the development of the economy and strengthened the local banking sector, the EBRD added.

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