The European Bank for Reconstruction and Development (EBRD) and Hungarian authorities have agreed to set up a working group to analyze the impact on the banking sector of the recent amendment of the Judicial Enforcement Act, the organization said today, according national wire service MTI.
The EBRD said it is committed to continue its fruitful cooperation with Hungarian authorities and institutions such as the National Bank of Hungary and the Banking Association, and the working group will work to identify ways to mitigate any potential adverse consequences of the amendment.
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 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 MOU, 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.