ECB gov warns Orbán on forex loan measures
European Central Bank governor Mario Draghi has warned Hungarian Prime Minister Viktor Orbán against uncoordinated steps regarding the country's big stock of foreign currency-denominated loans, Austrian daily Der Standard reported yesterday.
Draghi issued the warning in his capacity as the head of the European Systemic Risk Board (ESRB), Austrian central bank governor Ewald Nowotny said on the sidelines of a meeting of the IMF and World Bank in Washington.
Draghi said unilateral action could cause the decline in lending to accelerate, which would have negative effects on stability and growth.
Hungary's government has given banks until November 1 to come up with a solutionto the problem of the FX loans, based on consultations with borrowers. If banks fail to produce a solution by the deadline, the government has said it will act unilaterally; this threat was reiterated by Economy Minister Mihály Varga on Saturday in informing Népszabadság that the sitting government is “disappointed” by the financial institutions' lack of action in formulating a plan and that the government does indeed have an alternate solution prepared.
Inexpensive, Swiss franc-denominated loans were once the most popular retail lending product in Hungary, until the forint weakened, causing repayments to increase and putting many households at risk of default.
-- David Landry contributed to this story
Avg Gross Earnings at HUF 605,400 in February 2024
Bulgaria's Household Income, Spending Rise 20% in 2023
Spar Magyarország Revenue Climbs Close to 16% in 2023
Hungary Launches HUF 15 bln Tourism Sector Support Program
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
