Varga: Borrowers' relief won't break the banks


National Economy Minister Mihály Varga dismissed speculation that the borrowers’ relief package will bring banks to the brinks of bankruptcy, Hungarian business daily Világgazdaság reported today.

"Fears concerning bankruptcy are unfounded," Varga told the paper. He added that lenders had earlier signaled that they would get capital from their parent banks if necessary.

Reflecting on the latest speculation by the central bank that three our four foreign banks might be caused to leave the country, the minister said it was “pointless to speculate” as parent banks expressed their long-term commitment to stay in Hungary. 

The borrowers relief law forces banks to compensate mortgage holders who were hurt by fluctuations in the value of the forint, and some have estimated that it will cost the banking inudustry HUF 1 trillion.

Prime Minister Viktor Orbán has said he would like to see fewer foreign owners in the banking sectory, and he was able to advance toward that goal last week, when the Hungarian government agreed to buy MKB Bank from its German parent company.


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