MNB: Market impact of brokerage scandals limited, temporary

Analysis

Recent scandals at independent Hungarian brokerages have had a temporary and limited impact on the investment service provider market, the National Bank of Hungary (MNB) reported today.

"Although the broker cases adversely affected the market of investment service providers, the negative impact, for the time being, can be considered temporary, and no significant divestiture occurred in the sector," the MNB said in its quarterly Inflation Report.

"The brokerage cases did not significantly influence the investment behavior of corporations, while the brokerage cases may have only moderately affected the investment decisions of households," it added.

The MNB said there were no signs of "panic-driven withdrawals" of funds from brokerages, however, it noted that household savings were undergoing a modest restructuring in the direction of investments and investment service providers "deemed safer".

The Quaestor, Buda-Cash and Hungaria ÉrtÉkpapír brokerages all failed early in the year. DRB Banking Group, which had close ties to Buda-Cash, also went bust.

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