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Hungarian bankers are understandably wary of intervention in their industry. Six years of punitive bank taxes, not to mention the prohibitively expensive conversion of all the country’s Swiss franc loans into forint in 2014, have left a legacy of mistrust between banks and policymakers.
So when central bank (MNB) officials said in February that they were planning measures to cut the cost of mortgages for Hungarian consumers, it caused consternation in the financial sector.
Many saw the announcement as a sign that the Hungarian authorities were unhappy with the recent recovery in bank profitability. Others fretted that the move could mark the start of a new wave of populist bank-bashing ahead of next year’s parliamentary elections.
Talk of capping mortgage spreads well below current market levels fanned the fears and prompted a succession of bankers to issue urgent warnings of the dangers of undermining their industry.
After all this, the MNB’s unveiling last month of the outcome of its deliberations came as something of an anti-climax, as well as a surprise. In place of the expected attack on bank profits, the central bank revealed plans to encourage lenders to make home loans more affordable through the introduction of government certification.
