The ruling party in Hungary, Fidesz, has hit back at the European Central Bank, which criticized Hungary’s government for its alleged failure to consult with European officials on its plans to force banks to compensate its foreign exchange loan clients. The party issued a statement yesterday stating that the Central Bank Act was unaffected by the law, which is meant as retribution for unilateral changes by banks to the terms of the loan agreements. Hungarian borrowers, claims Fidesz, were not provided sufficient information about the risks involved in foreign currency loans, and it sees it as the state’s duty to protect consumer interests. It’s now estimated that the banks could take a hit of up to €2.9bn because of the measures, and the ECB voiced its concern that this could destabilize the country’s macroeconomic situation.
