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GVH: Law modification would increase competition on banking market

  Hungary’s Competition Office (GVH) said on Friday that, in spite of the banking alliance’s warnings, the proposed law modification limiting banks’ room for unilateral changes to bank-client contracts will increase competition on the market and will not raise the price of loans.

Hungary’s parliament is expected to vote on the change on Monday.

GVH claims that the changes will increase competition between banks and will not slow lending and make loans more expensive, as the banking alliance claims. GVH said it welcomed the proposed amendment which was in line with the office’s recommendations at several points.

GVH determined in an analysis conducted in December 2008 that the asymmetry of contracts in favor of financial institutions is growing significantly, which hurts competition.

GVH said fees for early repayment should be capped and borrowing information should be made available that can be compared easily with that of other banks, while state subsidies should made transferable from one bank to an other. (MTI-Econews)