The heads of Hungary's biggest banks support the National Bank of Hungary's "Funding for Growth Scheme", Hungarian Banking Association president Mihály Patai told journalists on Monday.
Patai spoke after a meeting of the bank heads and the MNB management to discuss a programme the central bank unveiled on Thursday to boost corporate lending. Under the Funding for Growth Scheme, the MNB will make available a combined HUF 500 billion of financing to banks for low-interest SME lending and the conversion of foreign currency-denominated corporate loans into forints. The MNB also said it would cut international reserves by €3 billion by reducing short-term external debt, thus lowering the stock of two-week bills - the central bank's main tool for soaking up excess liquidity - from HUF 4,500 billion to HUF 3,600 billion.
Patai said the economic growth the scheme aims to support is in the interest of the entire banking system. He added that the association had not formed its stand on the scheme, but said that individual members would decide themselves if they wanted to participate after the details are worked out.
Association vice president Dániel Gyuris said details of the scheme could be hammered out in a month. Among the details, he noted the terms of the loans as well as a system of guarantees. Patai suggested the MNB could reduce its stock of two-week bills by excluding purchases by banks that are not active in Hungary. At present, more than HUF 1,000 billion of the bills, according to some estimates, are held by banks that take no risk in Hungary and do not pay the bank levy, he added. What is done with the international reserves is entirely the responsibility of the independent central bank, Patai said.
Patai, who heads UniCredit Bank Hungary, and Gyuris, the chairman-CEO of OTP Mortgage Bank, were among the banking industry leaders who met with the MNB management on Monday. Other participants at the meeting were Sándor Csányi of OTP Bank, Rik Scheerlinck of K&H Bank, Zoltán Spéder of FHB Mortgage Bank, György Surányi of CIB Bank, Heinz Wiedner of Raiffeisen Bank, György Zolnai of Budapest Bank and Zoltán Urbán of the Hungarian Development Bank (MFB).