Unilateral FX loan conversion would hit forint -Hungary banks
BUDAPEST, Sept 10
BUDAPEST, Sept 10 (Reuters) - If banks were to convert all Swiss franc mortgages held by Hungarians into forints on their own, that would wreak havoc on the forint currency within days, the head of the Hungarian Banking Association, Mihaly Patai said on Tuesday.
"The banking system and banks cannot resolve this (problem of forex mortgages) without the government's support," Patai told private broadcaster Hir TV after leading bankers met with central bank Governor Gyorgy Matolcsy.
"If all banks were to decide that they will convert Swiss franc loans into forints, that would create such huge demand for the Swiss franc - we would need about 10-12 billion Swiss francs to carry this programme through -, which would disrupt the forint's exchange rate within days," Patai said.
On Monday the banking association said in a statement that without the involvement of the National Bank of Hungary the unilateral conversion of forex loans would make the forint's exchange rate unpredictable.
Hungary's prime minister, seeking re-election next year, warned the country's banks on Friday that the government would "eliminate" foreign currency mortgages unless banks helped borrowers deal with their losses by November 1.
(Reporting by Budapest newsroom; Writing by Gergely Szakacs)