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Brussels gives Hungary deadline to respond to bank concerns over FX scheme - wire

The European Commission has given Hungary a ten-week deadline to respond to concerns by banks over a government scheme that allows full early repayment of foreign currency-denominated mortgages at discounted rates, a spokesman for Commissioner responsible for internal market and services Michel Barnier said in Brussels on Monday, the Austrian Press Agency (APA) reported.

A week earlier, eight banks with businesses in Hungary pressed the European Commission to take action against the scheme. The CEOs or CFO of BayernLB, Erste Group, Intesa Sanpaolo, KBC, Raiffeisen Bank International and its parent Raiffeisen Zentralbank, Oesterreichische Volksbanken, and UniCredit said the scheme was a "blatant violation" of their rights in a letter sent to Mr Barnier.

"We received the letter and will answer it," said Mr Barnier’s spokesperson Chantal Hughes told APA. "We hope that a constructive and consensual solution can be found," she added.

Data from financial market regulator PSZAF show the scheme cost banks about HUF 44bn by the end of October, about a month after its launch.