One prerequisite to the thriving of the Hungarian economy is that the banking sector needs to keep up its lending activity, taking into account the conditions and risk factors prevailing on financial markets, as well as sustainability and stability criteria. In critical situations, an on-going dialogue is required between the Government and the banking community in order to allow the financial intermediary system to play an active role, along with a predictable and forward-looking regulatory environment and the consideration of the financial intermediary system’s ability to carry the burden.
In recent years, the Hungarian banking sector has shouldered significant financial burdens to safeguard the stability of the domestic economy. Looking ahead, it remains committed to preserving Hungary's financial stability, supporting economic development solutions and stimulating economic competition. Therefore, we supportively draw the attention of our Member Banks to the press release published by the Minister of Economic Development on the introduction of a voluntary interest rate cap. The setting of the interest rate levels of individual banks is a voluntary decision to be made by each Member Bank. We welcome the Hungarian Competition Authority’s (GVH) press release, which also draws attention to the importance of market competition in this area.
The Hungarian Banking Association trusts that the very costly financial burdens to be carried by the banking sector will help companies prepare for the busy year-end period and achieve higher turnover through the provision of working capital loans (granted, for example, for stock replenishment and/or raw material purchases) at very favourable interest rates. At the same time, low-interest housing loans will not only help restore transaction volumes on the real estate market, but will also create new opportunities for the construction industry.
We welcome the expected lifting of the interest rate freeze, which the Hungarian Banking Association has repeatedly objected to. We are convinced that its discontinuation will bring about a rapid recovery in market conditions and add new dynamism to lending.
The Government's economic policy can be most effectively supported by an internationally competitive banking sector with capital strength, which is at the forefront of digital processes. The Government's openness to the implementation of digitalisation proposals put forth by the banking sector is a forward-looking development, and therefore, the Hungarian Banking Association undertakes to submit to the Government, in the autumn of 2023, a package of proposals for the further digitalisation of lending processes, the exploitation of the benefits of digital citizenship and the efficient use of data assets. We wish thank the Government for its dedicated support of digital transition.
Budapest, 3 October 2023 The Hungarian Banking Association