Parliament approves bill on fund for Quaestor compenstion
The Hungarian parliament today approved a bill in an expedited procedure – 185 voting in favor and 5 voting against – to establish a top-up fund to compensate investors of failed brokerage Quaestor, Hungarian news agency MTI reported.
The news agency noted that the legislation will allow the special fund to issue bonds, with a maturity of up to ten years, and draw on a three-month bridging loan, with a state guarantee, from the National Bank of Hungary "in the interest of ensuring the fundʼs operation".
MTI added that a last-minute modification to the bill will also allow the fund to borrow from institutional lenders.
The fund will be managed by the board of Beva, which may require "pre-payments" from Beva members with the aim of "paying installments on the [special fundʼs] loans", according to the legislation, MTI said.
The Hungarian Banking Association this morning expressed concerns over the bill. "We understand that fraudsters must be taken into custody, but we donʼt take responsibility for the acts of those fraudster brokers," Levente Kovács, the chief secretary of the association, said, adding that "we also agree that the banking sector is now, also, overburdened."
Earlier, OTP Bank chief Sándor Csányi said it would be “unjustified” to force financial market players in Hungary to compensate investors for unsanctioned bonds issued by the now insolvent Quaestor boutique brokerage.
On Friday, Hungary’s Prime Minister Viktor Orbán insisted that “those who hurt clients need to be punished” and noted that the Fidesz government inherited a financial system that is in a “very bad condition.”
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