Kúria decision avoids “worst-case scenario,” bankers relieved


In response to the Kúria’s decision regarding outstanding forex-based loans, a pair of Budapest-based brokers opined to national news service MTI that this was good news indeed. Bálint Török of Buda-Cash Brokerage stated that the decision “prevented the worst-case scenario,” i.e. a declaration that all forex-based loans are invalid.

In Török’s opinion, such a decision might have “rattled Hungary’s financial system, entailing significant consequences for Hungary’s entire economy.”

Ákos Kuti of Equilor Investment meanwhile stated that banks need not take further losses in a government-backed bailout plan thanks to the decision and reckoned that the ruling “should provide the forint with a significant long-term boost, though will not prompt ratings agencies to upgrade Hungary.”

Banking Association relieved, says decision proof of lawful operation
Hungarian Banking Association (MBSz) chief secretary Levente Kovács was among the first to comment in media about the Kúria’s decision yesterday. In Kovács’s opinion, the decision demonstrated that “the banking sector has been operating lawfully.”

Kovács promised that Hungary-based banks would comply with the decision, stating that “we do not voice opinions on court rulings, we simply carry them out in full.” He also attempted to assuage customers’ fears by saying that “At the same time, we see the social problems stemming from mortgages. We know that many families are in need of assistance.”

Kovács went on to claim that about two-thirds of forex-based mortgage holders have received aid from the government and/or banks, with the newly-implemented exchange-rate cap scheme to assist debtors further.

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