MNB official says FX law could cost banks HUF 900 bln

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The FX loan bill submitted by the government last Friday to compensate borrowers who were hurt by foreign-exchange fluctuations might force banks to pay back a total of HUF 900 bln to debtors by late autumn, National Bank of Hungary deputy governor Ádám Balog told Hungarian daily Magyar Nemzet on Saturday.

According to the deputy governor, the bill would not threaten the stability of the banking system in Hungary, though some banks will have to change market positions and rethink their roles in the country.

The bill, submitted by Hungary’s governing party Fidesz on Friday, would force banks to compensate loan customers who lost money because their loans were denominated in foreign currency. The declining value of the forint meant that mortgage holders around the country were forced to pay increasingly large amounts to service their debts, and the law is meant to address this problem.

The rules for refunding debtors are to be based on the decision taken by Hungarian Supreme Court, the Curia, earlier in June.

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