In line with the Recommendation of the European Systemic Risk Board of 21 September
2011 on lending in foreign currencies (ESRB/2011/1) and particularly recommendation
for the host supervisor to communicate the measures to address foreign currency
lending to all relevant home supervisors and to the ESRB and the EBA HFSA hereby
provides a list of some legal regulations on this issue.
I. HUNGARIAN REGULATION
Summary:
Hungarian households, between 2004-2010, indebted mostly in foreign currencies
due to the significantly lower interest rates of such mortgages compared to HUF
loans, experienced a further increase of their debt burdens in 2011, principally
because of the HUF depreciation. In addition, banks increased CHF and EUR interest
rates. Dramatically increased instalments caused difficulties for a growing number
of debtors in Hungary.
Owing to rising risks and individual and institutional losses, responses and
solutions to foreign exchange exposure were in the focus of attention of policy
makers. Throughout 2011 foreign exchange lending to households was not only a
major problem from a financial consumer protection standpoint, but also became
a key economic policy, societal and public policy issue. Therefore relevant Hungarian
authorities continuously and deeply examined the issue and adopted a number of
necessary measures to limit future FX lending and address the associated risks
to mitigate the FX stock problem.
The primary objective of consumer protection regulatory measures was to assist
foreign currency loan debtors, to protect homes and to achieve transparent pricing.
More detailed information can be read in the following document:
Relevant Hungarian act:
- The Act CXII of 1996 on credit institutions and financial enterprises
Hungarian Decrees:
-
Government Decree on 361/2009 (XII.30.) on the terms of prudent retail lending
and the assessment of creditworthiness
-
Government Decree No. 366/2011. (30. XII.) on determining of the level of liquidity
of credit institutions and regulation of maturity match in case of foreign currency
position: rules on deposit and total assets coverage ratios are in force as of
16 January 2012, rules on foreign exchange funding adequacy ratio entered into
force on 1 July 2012.
Regulation issued by HFSA:
Other Hungarian regulation:
-
Magyar Nemzeti Bank, the central bank of Hungary (MNB)/HFSA Recommendation on
the systemic risks of foreign currency lending and institutional and consumer
protection requirements relating to the prudent assessment and management of such
risks, with special regard to Japanese yen-based lending (http://www.pszaf.hu/data/cms275873/pszafen_recom_mnbhfsa.pdf)
II. FX LENDING MEASURES OF OTHER EU MEMBER STATES
Hereby HFSA provides certain FX lending oriented measures of other EU Member
States (publicly available in English in line with the Recommendation of the European
Systemic Risk Board of 21 September 2011 on lending in foreign currencies (ESRB/2011/1)
http://www.esrb.europa.eu/pub/pdf/recommendations/2011/ESRB_2011_1.en.pdf?e4353effcfe506c17fa45d0e96c22261
-
Austria
-
Luxemburg
-
Romania
DISCLAIMER: The above outlined regulations are non-exhaustive information, only
contain some relevant regulation for information purpose.