Insurance fees rise following brokerage scandals

Telco

Annual fees for services of the National Deposit Insurance Fund (OBA) and the Investor Protection Fund (Beva) are expected to rise by HUF 20 bln to HUF 35 bln next year in order to cover the recent failures of the DRB Bank Group and brokerages Buda-Cash, Hungária Értékpapír and Quaestor, Márton Nagy, the central bank’s managing director, said in Saturday’s issue of Hungarian daily Magyar Hírlap.

According to the managing director, the elevated fees could remain unusually high for 6-8 years. Nagy, however, added that the amount does not include the top-up fund the Hungarian government is planning to establish for Quaestor clients.

The director noted that losses at these brokerages accounted for HUF 200-300 bln, less than 1% of the total HUF 26 trillion in assets on the domestic investment services market. According to the director, the recent brokerage scandals do not endanger the stability of Hungary’s financial system, however, the issue needs to be dealt with as it affects the savings of many Hungarians.

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