„The majority of mortgage loans in Hungary are Swiss-franc denominated, because up until the crisis of 2008, it was cheaper than forint-based alternatives. The euro-zone crisis, and the haven status of the Swiss currency, however, caused drastic strengthening and raised the regular installments Hungarians pay to extreme highs.
The banking sector has been wary of Mr. Orban’s government since seeing some of its previous measures and knows that the premier doesn’t give the impression of being a big friend to the finance sector. Banks are one of the sectors paying a so-called crisis tax. When it became evident that earlier expected economic growth would not happen after disappointing second-quarter gross domestic product data were recently published, markets feared that banks would be the government’s targets.
True enough, the premier stressed that foreign banks, which have been limiting their lending in Hungary anyway, have their parents to rely on when it comes to coping with the related losses. At the same time he stressed that the Hungarian banks will have the state as support. He also said the government has found a way to modify the terms of standing loan contracts. Mr. Orban said he is aware that there will be organizations questioning the legitimacy of the move, but stressed that the government is ready to face up to the challenge.”