Varga: A “good starting point” to forex-loan negotiation

Initiatives

Negotiations between the National Economy Ministry and the Hungarian Banking Association (MBSz) over the incipient forex-based loan crisis may be nowhere near conclusion, but at least they’ve reached “a good starting point.”

That’s how the MBSz proposals to the ministry was described by National Economy Minister Mihály Varga on M1’s television program “Híradó.”

The Hungarian Banking Association (MBSz) presented two proposals on a relief plan for borrowers of forex-based mortgage loans yesterday. After a meeting between the two parties, MBSz spokesperson Ágnes Suto explained to MTI that “the proposals involve a combination of converting the FX loans into forints, interest subsidies and an exchange rate limit.”

MBSz Chairman Mihály Patai meanwhile told media that banks may be expected to pay out “several hundred billion forints over a period of several years.” Said Patai, “The main aspect of our proposal was to observe the aspects that the government had requested and [that] monthly repayments should fall drastically…”

Patai promised that the MBSz proposals, if accepted, would “result in a significant cut in the installments payable by debtors,” and that “the lion’s share of the ensuing financial burden … would be borne by the banks for years.”

While Varga appeared generally optimistic about early progress on the issue, the minister did not hesitate in clarifying that while the MBSz proposals “may serve as basis for negotiations[,] the Association has obviously been keen to protect the interests of banks.” Varga reckons that a solution will be arrived at by sharing the burden “in a more or less proportionate way.”

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