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MNB: Banks would need €700-900 mln if forint weakens

  Hungary’s banking system would need an additional €700-900 million to keep capital adequacy ratios stable if the forint were to weaken sharply and the recession were to deepen, a study by the National Bank of Hungary shows.

Hungarian banks have an average capital adequacy ratio of about 11%, which is sufficient, said Marton Nagy, who works for the MNB in the area of financial stability.

The study, designed to measure stress situations, calculated with a HUF/EUR rate 15% weaker than the 290 exchange rate used by the central bank and an economic contraction of 7%, double the contraction currently seen by the MNB. (MTI-Econews)