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In Hungary in the pre-crisis period, the bank sector-initiated private credit boom significantly contributed to the accumulation of economic imbalances. Nevertheless, before the 2008 crisis no special regulatory measure was taken to mitigate the foreign exchange lending to unhedged borrowers, which was a main moving force of the credit boom. Depreciation of forint-denominated subsidized housing loans and the increased risk premium significantly deteriorated customers' positions and resulted in rocketing nonperforming loans. A recession, deteriorating portfolios, and lack of efficient workout. The introduction of strict regulation froze banking activity and the danger of recovery without lending emerged. This paper compares the pre- and post-crisis lending activity and analyzes the lack of regulation in the pre-crisis period and the inefficient regulation in the post-crisis period.

Bibliographic Details

Main Authors:	Banai, Adam, Kiraly, Julia, Nagy, Marton
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	2011-10-01
Subjects:	ASSET PRICES, BAD DEBTS, BALANCE SHEET, BALANCE SHEETS, BANK FINANCING, BANKING MARKET, BANKING SECTOR, BANKING SUPERVISION, BANKING SYSTEM, BANKING SYSTEMS, BRANCH NETWORK, BROKERS, BUDGET DEFICIT, CAPITAL ADEQUACY, CAPITAL MARKET, CAPITAL MARKETS, CAPITAL REGULATION, CAPITAL REQUIREMENTS, CASH OUTFLOW, CENTRAL BANK, COLLATERAL, COMMERCIAL BANKING, COMMERCIAL BANKS, CONFLICT OF INTEREST, COOPERATIVE CREDIT, CREDIT BOOM, CREDIT BOOMS, CREDIT EXPANSION, CREDIT FLOW, CREDIT FLOWS, CREDIT GROWTH, CREDIT HISTORY, CREDIT INSTITUTIONS, CREDIT RISK, CREDITORS, CREDITWORTHINESS, CRISIS LENDING, CURRENCY CRISES, CURRENT ACCOUNT DEFICIT, DEBT, DEBT SERVICE, DEBT SERVICING, DEBTORS, DEBTS, DEFAULT RATES, DEPOSIT, DEPOSIT INSURANCE, DEPOSITS, DEPRECIATION, DERIVATIVES, DEVALUATION, DISBURSEMENT, DISBURSEMENTS, DOMESTIC BANKING, DOMESTIC BANKING SYSTEM, DOMESTIC BANKS, DOMESTIC CURRENCY, DOMESTIC MARKET, ECONOMIC IMBALANCES, ECONOMIC MODEL, ECONOMIC RISKS, EIB, EMERGING MARKETS, ENTRY BARRIER, EQUILIBRIUM, EQUILIBRIUM LEVEL, EQUILIBRIUM LEVELS, EQUILIBRIUMS, EUROPEAN CENTRAL BANK, EXCESS SUPPLY, EXCHANGE RATE, EXCHANGE RATE RISK, EXCHANGE RATES, EXCHANGE-RATE, EXPLANATORY VARIABLES, EXTERNAL FUNDING, EXTERNAL INDEBTEDNESS, EXTERNAL TRADE, FINANCIAL CRISIS, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIATION, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL STABILITY, FINANCING REQUIREMENT, FLOW OF CREDIT, FORECLOSURE, FOREIGN ASSETS, FOREIGN BANKS, FOREIGN CURRENCY, FOREIGN CURRENCY LENDING, FOREIGN CURRENCY LOAN, FOREIGN CURRENCY LOANS, FOREIGN CURRENCY REVENUES, FOREIGN EXCHANGE, FOREIGN FUNDS, FOREIGN INTEREST, FOREIGN INTEREST RATES, FOREIGN LOANS, GOVERNMENT BONDS, GOVERNMENT PAPERS, GOVERNMENT SECURITIES, GROSS DOMESTIC PRODUCT, GROWTH RATE, HOLDING, HOME CURRENCY, HOME EQUITY, HOME EQUITY LOANS, HOUSING, INDEBTEDNESS, INDIVIDUAL LOAN, INFLATION, INFORMATION ASYMMETRY, INSURANCE, INSURANCE COMPANIES, INTERBANK MARKETS, INTEREST RATE DIFFERENTIAL, INTEREST RATE VOLATILITY, INTEREST RATES, INTEREST RATES ON LOANS, INTEREST-RATE, INTERNAL SAVINGS, INTERNATIONAL BANK, INTERNATIONAL FINANCIAL INSTITUTIONS, ISSUANCE, LABOR MARKET, LACK OF TRANSPARENCY, LEGISLATION, LENDER, LENDER OF LAST RESORT, LENDERS, LEVIES, LEVY, LIABILITY, LIABILITY SIDE, LIQUID ASSET, LIQUID ASSETS, LIQUIDITY, LIQUIDITY CRISIS, LIQUIDITY MANAGEMENT, LIQUIDITY POSITION, LIQUIDITY PROBLEMS, LIQUIDITY RATIO, LIQUIDITY RATIOS, LIQUIDITY RISKS, LOAN, LOAN AGREEMENTS, LOAN CONTRACT, LOAN MARKET, LOAN PORTFOLIO, LOAN PORTFOLIOS, LOAN PRODUCT, LOAN PRODUCTS, LOAN VOLUME, LOANS FROM BANKS, LOCAL BANKS, LOCAL CURRENCY, LONG-TERM LOANS, MACROECONOMIC VARIABLES, MARKET ENVIRONMENT, MARKET PLAYERS, MARKET SEGMENT, MARKET SHARE, MATURITY, MATURITY MISMATCH, MATURITY MISMATCHES, MONETARY FUND, MONETARY POLICY, MONETARY REGIME, MORTGAGE, MORTGAGE BOND, MORTGAGE BOND MARKET, MORTGAGE BONDS, MORTGAGE LENDING, MORTGAGE LOAN, MORTGAGE LOANS, MORTGAGES, MULTINATIONAL BANK, MUNICIPAL BONDS, NOMINAL INTEREST RATES, NONPERFORMING LOANS, OPEN ECONOMY, OUTSTANDING AMOUNT, PORTFOLIO QUALITY, PORTFOLIOS, PREPAYMENT, PRIVATE CREDIT, PRIVATIZATION, PROBABILITY OF DEFAULT, PROFITABILITY, PRUDENTIAL SUPERVISION, PUBLIC DEBT, RAPID GROWTH, REAL INTEREST, REAL INTEREST RATE, RECESSION, REGULATORY AUTHORITIES, RESERVE, RESERVE RATIOS, RESERVE REQUIREMENT, RESERVE REQUIREMENTS, RESERVES, RETURN, RISK EXPOSURE, RISK FACTOR, RISK MANAGEMENT, RISK PREMIUM, SECONDARY MARKETS, SECURITIES, STATE GUARANTEE, STATE GUARANTEES, STATE INTERVENTION, STATE LOAN, STOCK MARKET, SUBSIDIARIES, SUPERVISORY AUTHORITY, SUPERVISORY POWER, SWAP, SWAP MARKET, SWAPS, SYSTEMIC RISK, TAX, TRADING, TRANSACTION, TRANSITION ECONOMY, TRANSPARENCY, UNCERTAINTY, UNDERDEVELOPED CAPITAL MARKET, UNSECURED LOANS, VARIABLE INTEREST RATES,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111005153617 http://hdl.handle.net/10986/3600
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