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Hungary joins CEE statement protesting comments on region - update

Hungarian financial market regulator PSzÁF also signed a joint statement by its peers in the Czech Republic, Slovakia, Poland, Romania and Bulgaria expressing concern that “the publicly announced initiatives” warning about the risks to the old EU Member States’ banks due to high exposures in CEE countries were “misleading”, a copy of the document sent to MTI by PSzÁF reveals.  

The text of the document on the homepages of the Czech and Slovakian national banks was first published without Hungary listed as a participant in the statement or a signer thereof.

Government spokeswoman Bernadett Budai said after a cabinet meeting on Wednesday that PSzÁF joined the statement because it was in agreement with the other signers. The joint statement is about how the region can step forward as a unit, she added.

“The published information accompanying these initiatives is often simplified and misleading and could have negative implications for banks operating in these countries. Such self-fulfilling speculation totally disregards fundamental economic developments in the CEE countries and creates misperceptions that could inevitably be detrimental to both the CEE region and Europe as a whole,” the statement said.

The statement noted that EU banks' units operating in CEE member states are supervised by the regulator of the country in which they operate and also on a consolidated basis by the supervisory authority of the parent company, the affected regulators cooperate closely.

The joint statement stressed that Central East Europe is not a homogenous region and underlined the need to distinguish between the EU Member States and the non-EU countries as well as to clarify issues specific to particular countries or particular banking groups.

The supervisory authorities of the five countries “would strongly welcome it if future initiatives assessing the risk of CEE countries and its possible impact on European economies could respect the given roles and responsibilities of the supervisors and governments of each Member State, which include consideration of all possible measures directed at preserving the stability of individual financial institutions and each Member State's financial sector as whole.”

At the same time, the statement expressed support for close cooperation between regulators aimed at fostering a coordinated approach to the current issues of the financial crisis.

PSzÁF chairman István Farkas told MTI that an informal agreement on the document was reached, with the participation of Hungarian officials, at a meeting of the Committee of European Banking Supervisors (CEBS) taking place in Prague.

The Hungarians expected a formal agreement on the document to be reached at the end of meeting, so it came as a surprise when the joint statement was published signed by just five countries, but not Hungary.

Steps were taken immediately to see Hungary included among the signers, as it was, in the course of talks, in agreement with all of the main elements of the statement, Farkas said.

After Hungary acted, the text of the document displayed on the central bank homepages was modified to include Hungary and the country was named as a signer.