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Hungary seeks international advice on forex mortgage troubles

Hungarian Economy Minister György Matolcsy has sent a letter to Andrea Enria, chairman of the European Banking Authority, about the “serious problems” caused for households by loans denominated in Swiss francs, reports Bloomberg.

According to Matolcsy, the risks of foreign-currency lending should be curbed through consumer and “macroprudential” regulation in Hungary and on a European Union level. He asked for examples of countries which managed the problem more successfully, according to an e-mailed statement from the ministry.

Nearly two-thirds of Hungarian household mortgages were denominated in foreign currencies, most of them in the franc, as of June 30, according to central bank data. The forint has weakened 6.8% against the Swiss franc this year, swelling households’ mortgage repayment obligations.

The ministry will use the information received from the EBA in its work examining the roots of the lending problem, according to the statement.