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Hungary: Eleven lenders fined for forex loan repayment cartel

By  |  November 20, 2013

The competition authority of Hungary has imposed fines totaling about $43.3 million on eleven banks for their participation in a cartel that restricted loan financing, say reports.

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    The regulator GVH imposed the fines on lenders including OP, Erste, Bank Austria and MKB for their involvement in the scheme following government plans that allowed loan holders to swap foreign-currency debts for domestic currency loans. According to reports, regulators found the banks to have illegally colluded to prevent such refinancing in order to reduce mortgage repayments.

    The government scheme was one of the most controversial measures imposed b Prime Minister Viktor Orban’s administration, reports say. The plan allowed borrowers to refinance their foreign-currency loans at artificially low exchange rates in late 2011 and early 2012, leading to banks losing more than $1 billion.

    OTP, which received the largest fine, said it plans to appeal. Other lenders similarly dismissed the charges as false and said they would consider their own appeals.

    Full Content: Reuters

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