MNB to offer HUF 46 bln bridging loan to compensate clients of failed brokerages
MNB headquarters in Budapest (Image by Jessica Fejos)
The National Bank of Hungary (MNB) said it will grant a HUF 46 billion bridging loan to a special fund established to compensate investors of failed independent brokerages over an existing insurance threshold, Hungarian news agency MTI reported yesterday.
The three-month loan will have a floating rate level with the central bank base rate. It will carry a state guarantee.
The MNB noted that the fund may request a central bank bridging loan only once.
Investors in two independent brokerages that failed early last year, Quaestor and Hungaria Securities, were already eligible for compensation from the Investor Protection Fund (Beva) up to the €20,000 threshold, but lawmakers approved legislation that effectively raised the threshold to about €100,000 and left Beva members to cover the difference.
Legislation on compensating the investors stipulates that the top-up fund may take out a bridging loan from the MNB to pay the compensation and refinance it with a bond or loan with a maturity up to twelve years. Beva members are not required to pay into the fund until March 2017.
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