Simor urges end to "vicious cycle" of burdening banks
National Bank of Hungary governor András Simor on Tuesday pressed for an end to the "vicious cycle" of placing state burdens on banks, causing a further decline in lending activity and hurting growth as well as the country's fiscal position.
Banks do not reduce interest margins because of the burdens placed upon them by the state, Simor told the forum organised by Portfolio.hu. Because of this, the ratio of non-performing loans grows, which causes banks' ability to lend to deteriorate further, thus negatively affecting economic growth and the budget, he explained.
Simor said that restarting lending activity in Hungary was a problem of supply rather than demand. Banks' propensity to take risk is low, he added, reiterating a stand taken earlier by the central bank. Banks have no shortage of financing for their lending activities, he said.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
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.