„Home high above and home deep down below?” Lending in Hungary

Banai, Ádám and Király, Júlia and Nagy, Márton (2012): „Home high above and home deep down below?” Lending in Hungary. Published in: Crisis Aftermath: Economic policy changes in the EU and its Member States, Conference Proceedings, Szeged, University of Szeged , Vol. ISBN 9, (2012): pp. 36-62.

Abstract

In Hungary in the pre-crisis period the bank sector initiated private credit boom significantly contributed to the accumulation of economic imbalances. Nevertheless, before the 2008 crisis no special regulatory measure was taken to mitigate the FX lending to unhedged borrowers, which was one of the main moving force of the credit boom. Depreciation of the HUF and the increased risk premium significantly deteriorated the customers’ positions and resulted rocketing NPL-s. Recession, deteriorating portfolios, lack of efficient workout and the introduced strict regulation did freeze banking activity and the danger of recovery without lending did emerge. The paper compares the pre- and post-crisis lending activity and analyse both the lack of regulation in the pre-crisis and the inefficient regulation in the post-crisis period.

• Item Type: MPRA Paper
• Language: English
• Keywords: FX lending; macro prudential measures; credit growth; financial stability
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

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