Banai, AdamKiraly, JuliaNagy, Marton2012-03-192012-03-192011-10-01https://hdl.handle.net/10986/3600In Hungary in the pre-crisis period, the bank sector-initiated private credit boom significantly contributed to the accumulation of economic imbalances. Nevertheless, before the 2008 crisis no special regulatory measure was taken to mitigate the foreign exchange lending to unhedged borrowers, which was a main moving force of the credit boom. Depreciation of forint-denominated subsidized housing loans and the increased risk premium significantly deteriorated customers' positions and resulted in rocketing nonperforming loans. A recession, deteriorating portfolios, and lack of efficient workout. The introduction of strict regulation froze banking activity and the danger of recovery without lending emerged. This paper compares the pre- and post-crisis lending activity and analyzes the lack of regulation in the pre-crisis period and the inefficient regulation in the post-crisis period.CC BY 3.0 IGOASSET PRICESBAD DEBTSBALANCE SHEETBALANCE SHEETSBANK FINANCINGBANKING MARKETBANKING SECTORBANKING SUPERVISIONBANKING SYSTEMBANKING SYSTEMSBRANCH NETWORKBROKERSBUDGET DEFICITCAPITAL ADEQUACYCAPITAL MARKETCAPITAL MARKETSCAPITAL REGULATIONCAPITAL REQUIREMENTSCASH OUTFLOWCENTRAL BANKCOLLATERALCOMMERCIAL BANKINGCOMMERCIAL BANKSCONFLICT OF INTERESTCOOPERATIVE CREDITCREDIT BOOMCREDIT BOOMSCREDIT EXPANSIONCREDIT FLOWCREDIT FLOWSCREDIT GROWTHCREDIT HISTORYCREDIT INSTITUTIONSCREDIT RISKCREDITORSCREDITWORTHINESSCRISIS LENDINGCURRENCY CRISESCURRENT ACCOUNT DEFICITDEBTDEBT SERVICEDEBT SERVICINGDEBTORSDEBTSDEFAULT RATESDEPOSITDEPOSIT INSURANCEDEPOSITSDEPRECIATIONDERIVATIVESDEVALUATIONDISBURSEMENTDISBURSEMENTSDOMESTIC BANKINGDOMESTIC BANKING SYSTEMDOMESTIC BANKSDOMESTIC CURRENCYDOMESTIC MARKETECONOMIC IMBALANCESECONOMIC MODELECONOMIC RISKSEIBEMERGING MARKETSENTRY BARRIEREQUILIBRIUMEQUILIBRIUM LEVELEQUILIBRIUM LEVELSEQUILIBRIUMSEUROPEAN CENTRAL BANKEXCESS SUPPLYEXCHANGE RATEEXCHANGE RATE RISKEXCHANGE RATESEXCHANGE-RATEEXPLANATORY VARIABLESEXTERNAL FUNDINGEXTERNAL INDEBTEDNESSEXTERNAL TRADEFINANCIAL CRISISFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIATIONFINANCIAL MARKETFINANCIAL MARKETSFINANCIAL STABILITYFINANCING REQUIREMENTFLOW OF CREDITFORECLOSUREFOREIGN ASSETSFOREIGN BANKSFOREIGN CURRENCYFOREIGN CURRENCY LENDINGFOREIGN CURRENCY LOANFOREIGN CURRENCY LOANSFOREIGN CURRENCY REVENUESFOREIGN EXCHANGEFOREIGN FUNDSFOREIGN INTERESTFOREIGN INTEREST RATESFOREIGN LOANSGOVERNMENT BONDSGOVERNMENT PAPERSGOVERNMENT SECURITIESGROSS DOMESTIC PRODUCTGROWTH RATEHOLDINGHOME CURRENCYHOME EQUITYHOME EQUITY LOANSHOUSINGINDEBTEDNESSINDIVIDUAL LOANINFLATIONINFORMATION ASYMMETRYINSURANCEINSURANCE COMPANIESINTERBANK MARKETSINTEREST RATE DIFFERENTIALINTEREST RATE VOLATILITYINTEREST RATESINTEREST RATES ON LOANSINTEREST-RATEINTERNAL SAVINGSINTERNATIONAL BANKINTERNATIONAL FINANCIAL INSTITUTIONSISSUANCELABOR MARKETLACK OF TRANSPARENCYLEGISLATIONLENDERLENDER OF LAST RESORTLENDERSLEVIESLEVYLIABILITYLIABILITY SIDELIQUID ASSETLIQUID ASSETSLIQUIDITYLIQUIDITY CRISISLIQUIDITY MANAGEMENTLIQUIDITY POSITIONLIQUIDITY PROBLEMSLIQUIDITY RATIOLIQUIDITY RATIOSLIQUIDITY RISKSLOANLOAN AGREEMENTSLOAN CONTRACTLOAN MARKETLOAN PORTFOLIOLOAN PORTFOLIOSLOAN PRODUCTLOAN PRODUCTSLOAN VOLUMELOANS FROM BANKSLOCAL BANKSLOCAL CURRENCYLONG-TERM LOANSMACROECONOMIC VARIABLESMARKET ENVIRONMENTMARKET PLAYERSMARKET SEGMENTMARKET SHAREMATURITYMATURITY MISMATCHMATURITY MISMATCHESMONETARY FUNDMONETARY POLICYMONETARY REGIMEMORTGAGEMORTGAGE BONDMORTGAGE BOND MARKETMORTGAGE BONDSMORTGAGE LENDINGMORTGAGE LOANMORTGAGE LOANSMORTGAGESMULTINATIONAL BANKMUNICIPAL BONDSNOMINAL INTEREST RATESNONPERFORMING LOANSOPEN ECONOMYOUTSTANDING AMOUNTPORTFOLIO QUALITYPORTFOLIOSPREPAYMENTPRIVATE CREDITPRIVATIZATIONPROBABILITY OF DEFAULTPROFITABILITYPRUDENTIAL SUPERVISIONPUBLIC DEBTRAPID GROWTHREAL INTERESTREAL INTEREST RATERECESSIONREGULATORY AUTHORITIESRESERVERESERVE RATIOSRESERVE REQUIREMENTRESERVE REQUIREMENTSRESERVESRETURNRISK EXPOSURERISK FACTORRISK MANAGEMENTRISK PREMIUMSECONDARY MARKETSSECURITIESSTATE GUARANTEESTATE GUARANTEESSTATE INTERVENTIONSTATE LOANSTOCK MARKETSUBSIDIARIESSUPERVISORY AUTHORITYSUPERVISORY POWERSWAPSWAP MARKETSWAPSSYSTEMIC RISKTAXTRADINGTRANSACTIONTRANSITION ECONOMYTRANSPARENCYUNCERTAINTYUNDERDEVELOPED CAPITAL MARKETUNSECURED LOANSVARIABLE INTEREST RATESWorld Bank10.1596/1813-9450-5836