Bloomberg News

Hungary Banks, Government to Share Foreign Currency Loan Burden

December 15, 2011

Dec. 15 (Bloomberg) -- Hungary’s government and commercial banks have agreed to burden-sharing on foreign currency mortgage loans, Economy Minister Gyorgy Matolcsy said.

Banks will assume two-thirds of the loan burden above 180 forint per Swiss franc, costing them 600 billion forint over five years, Matolcsy told reporters today. The government’s share is one-third, amounting to 300 billion forint, he said.

Foreign currency mortgage loans overdue by more than 90 days will be converted to forint and one-fourth of the oustanding amount will be written off, Matolcsy said.

The agreement is a “milestone” and “open to everyone” and should boost the forint, Bank Association President Mihaly Patai said. The duration of the agreement is five years.

To contact the editor responsible for this story: Zoltan Simon at zsimon@bloomberg.net


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