Hungary's banks face rising funding costs, no freeze

„Hungarian banks have been among the worst hit in emerging Europe by the euro zone debt crisis which threatens to squeeze credit flows from western European parent banks to their emerging market subsidiaries.

That risk has been compounded by government moves to raise tax revenues and reduce pressure on Hungarians saddled with foreign currency loans, mostly Swiss-franc-denominated, whose monthly payments have spiked due to the plummeting forint.

Weeks after taking office, Orban levied a 189 billion forint ($809 million) tax on the financial sector and imposed an eviction moratorium to help non-paying mortgage debtors.

The government also forced banks to accept early repayments of mortgages at a rate of 180 forints per franc - far below market rates of more than 250 - sticking banks with hundreds of billions of forints in damages potentially.

Rating agencies have cited the unpredictable policy moves when cutting Hungary's credit grade or putting it on warning, triggering a sell-off on the forint currency and Hungary's stock and bond markets.”