The President of the Hungarian Banking Association has resigned, the association’s chief secretary told state-run newswire MTI on Tuesday.
Levente Kovács wrote MTI that Mihály Patai had already promised to step down in case Parliament approves yet another arbitrarily created fiscal adjustment package that puts additional burden on the banking sector which is beyond its capacities.
Hungarian Banking Association President to resign if Parliament passes anti-bank laws (2)
Late on Monday, lawmakers passed the government’s austerity measures which prompted Patai to tender his resignation formally. The Banking Association has started preparations to call for an extraordinary general meeting to appoint a new President and a new member to the presidency – a position vacated in the meantime – who will represent small banks.
According to the statutes, Vice-President Dániel Gyuris will step up to replace Patai temporarily. Timothy Ash, economist at Standard Bank in London, reminded that Patai had threatened to resign a couple of weeks back therefore his decision is “not entirely a shock, but still it underlines the poor state of relations in Hungary between the banks (mostly foreign) and the government.”
“And because of this Hungary has suffered one of the most rapid rates of foreign bank deleveraging. BIS data shows that as of June foreign banks exposure to Hungary was down to something like 60% of the pre-Lehman level, and there is some evidence to suggest that the rate of deleveraging is accelerating because of foreign bank dislike of the environment around banks in the country,” Ash added in an emailed comment to clients.