Hungarys banking sector ready to cut FX borrowers' debt.

By bne IntelliNews March 21, 2013
Hungarian banks are working on a complex proposal to support troubled borrowers with foreign currency-denominated home loans, which will be presented to the government within a week, MTI news agency reported citing local daily Nepszabadsag. Under the proposal, borrowers could either convert the balance on their loans into forints at current exchange rates and take a write-down of part of the principal, or borrowers could keep their balance in foreign currency but take a write-down on part of the amount they are behind on their payments, which would allow them to join an earlier launched exchange rate limit scheme. The Hungarian Banking Association is currently holding talk on a bailout package for FX borrowers but has not scheduled any announcements on the progress of negotiations. Hungarian lenders have expressed readiness to write off part of overdue FX mortgage loans in exchange for a reduction of the bank tax.

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