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Moody's places seven Hungarian banks on review for downgrade

September 25, Moody's Investors Service placed the foreign currency deposit ratings of seven Hungarian banks, including OTP Bank Nyrt, on review for possible downgrade after a similar review of the country's sovereign ratings last week. OTP Bank and its mortgage unit, OTP Jelzálogbank Zrt, Budapest Bank Zrt, K&H Bank Zrt, MKB Bank Nyrt, CIB Bank Zrt and state-owned Magyar Fejlesztési Bank Zrt were cited for review by Moody's yesterday, the company said in a statement. The move comes after Moody's placed Hungarian sovereign ratings on a similar review September 22, which will focus on assessing the government's willingness and ability to cut spending. Moody's rates the country's long-term foreign and local currency debt at A1, four steps from the top. Hungarian protesters demanding the resignation of Prime Minister Ferenc Gyurcsány clashed with riot police in downtown Budapest three nights last week. The public outcry may make it difficult for the government to implement its austerity measures, according to Moody's. (Bloomberg)