Template-Type: ReDIF-Article 1.0
Author-Name: Pál Péter Kolozsi
Author-Name: Ádám Banai
Author-Name: Balázs Vonnák
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: kolozsip@mnb.hu
Title: Phasing out household foreign currency loans: schedule and framework
Abstract: Due to a peculiar constellation of demand, supply and institutional factors, Hungary faced the 2008 economic crisis with a massive portfolio of 
household foreign currency loans. After several measures to mitigate the exposure of households, the permanent solution of phasing out foreign currency and 
foreign currency based mortgage loans was achieved in 2014. In this article, we argue that at the time of conversion the legal and 
economic conditions reduced the unavoidable risks to a reasonable level, where the expected social and welfare benefits of the conversion offset such risks. 
The implementation of the conversion was made possible by the coordinated foreign currency sale programme of the MNB. Under the programme, 
the MNB provided a total amount of EUR 9.1 billion to the banking system in a coordinated fashion, while promoting banks’ cooperation and ensuring central bank
FX reserve adequacy. Owing to the central bank’s programme, the conversion took place without significant impact on the forint exchange rate.
Classification-JEL: E58, E65, G21
Keywords: mortgage loans, financial stability, monetary policy, debt consolidation, conversion
Journal: Financial and Economic Review  
Pages: 60-87
Volume: 14
Issue: 3
Year: 2015
File-URL: http://english.hitelintezetiszemle.hu/letoltes/3-kolozsi-banai-vonnak-en.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:14:y:2015:i:3:p:60-87