Hungary’s central bank sees no risk of lending overheating

The National Bank of Hungary (NBH) is not concerned with possible overheating of the lending market, the NBH said in an emailed response to Reuters. There are no signs for such overheating in the future despite strong loan growth and signs for easing lending conditions by banks, it said. The loan-to-GDP level and other indicators suggest that overheating is not a risk for the near future. Banks’ price competition could deepen further before banks start to take up more riskier lending, the NBH argued. Consequently, it did not plan new regulatory action on lending activity. Macroprudential rules imposed on retail lending have been effective in keeping the recovery of household borrowing within healthy limits, the NBH said, in our opinion referring to the loan-to-income and loan-to-value maximum ratios introduced in Jan 2015.

Share this post