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Matolcsy says earlier govts, central bank could have taken steps to protect forex borrowers

National Economy Minister György Matolcsy told a parliamentary committee on Monday that earlier finance ministers and the central bank should have taken protective measures when foreign currency-based lending became widespread after 2003.

Matolcsy said the National Bank of Hungary should have adjusted its international reserves to the growing stock of foreign currency-denominated loans after 2003. If the central bank had topped up its reserves with more Swiss francs -- once the base for the most popular retail lending products in Hungary -- it would now be able to intervene, he said.

The finance ministers should have told banks to set aside risk provisions for their foreign currency-based loans, and required borrowers with such loans to take out exchange rate insurance, he added.