An argument in favour of the PM’s idea of placing half of the banks in Hungarian hands
September 1st, 2012A pro-government analyst approves the Prime Minister’s idea that at least half of Hungary’s banking sector ought to be in Hungarian hands.
Three days after defending Viktor Orbán’s plan to buy back Hungary’s main gas supply chain from its German owner (see BudaPost, August 29), Magyar Nemzet’s Csaba Erdősi elaborates on why he believes it would make sense to have a substantial proportion of the banking system in Hungarian hands. This was an idea raised by the Prime Minister two weeks ago, addressing a meeting of entrepreneurs.
Erdősi remarks that the current 90 per cent plus foreign ownership ratio in the Hungarian banking sector is only exceeded by countries like Burkina Faso, Barbados or Madagascar. Domestic ownership is significantly higher in Slovakia, Romania, the Czech Republic and Poland. Quoting a recent report by the National Bank, the commentator points out that the international owners of Hungary’s banks have withdrawn huge amounts of money since the crisis (1700 billion HUF in 2010 and 1800 billion in 2011). He dismisses the view that they did so because of the special banking tax introduced by the conservative government, arguing that the American (General Electric) owned Budapest Bank was even more profitable last year than in 2008. The banking sector as a whole is reported to be in the red, but according to the Magyar Nemzet commentator, this is due precisely to the massive capital withdrawal. He believes Hungarian-owned banks would be less likely to pump capital out of the country.