Hungary banking system stable, but there are limits to what it can bear

Initiatives

In spite of the bank levy and problems caused by the crisis, Hungary's banking system is stable, as are the parents of foreign-owned banks, but its load-bearing capacity has limits, Janos Muller, the chief advisor for the Hungarian Banking Association, told MTI.

Muller was commenting on the sharp weakening of the forint in recent days, especially against the Swiss franc, a currency in which a large part of Hungarian banks' stock of retail loans is denominated.

The forint weakened as far as 273.43 to the Swiss franc overnight on Tuesday but had firmed back to 265.53 early Thursday.

Stress tests conducted by the National Bank of Hungary last October showed the country's banking system was resilient enough to withstand a strengthening of the Swiss franc to 245 forints at the end of 2011 and to 257 forints at the end of 2012.

Muller told MTI Hungary's banking system is "resistant to shocks" and that the assistance program for borrowers with foreign currency-denominated loans as well as moves by the US Fed and the ECB would calm markets. Although Hungary's banking system is strong and operating normally, the current situation calls attention to the fact that there are limits to what the system can bear, he added.

ADVERTISEMENT

Századvég raises GDP forecast to 7.8% Analysis

Századvég raises GDP forecast to 7.8%

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

New editor-in-chief at Betone Studio Appointments

New editor-in-chief at Betone Studio

Budapest leaders make public transport free for under-14s City

Budapest leaders make public transport free for under-14s

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.