Credit Crunch in Hungary between 2009 and 2013: Is the Creditless Period Over?

Financial and Economic Review, Vol. 13, Issue 4, pp. 11-34, 2014

24 Pages Posted: 5 Apr 2016

See all articles by Adam Balog

Adam Balog

Independent

György Matolcsy

Magyar Nemzeti Bank

Márton Nagy

Magyar Nemzeti Bank

Balazs Vonnak

National Bank of Hungary

Date Written: November 10, 2014

Abstract

This article provides a review of the Hungarian credit crunch between 2009 and 2013, including its causes and its nature, with particular regard to a factor playing a crucial role in growth: SME-lending. It is argued that, although the indebtedness of the corporate sector was much less excessive and unhealthy in structure than that of the household and the public sectors, the disruptions of the financial intermediary system resulted, to a large degree, in the decline in corporate lending. The article then goes on to present the Funding for Growth Scheme (FGS) and the economic logic behind its operating mechanism. Finally, it assesses the impact of the first phase of the programme on lending and economic growth, and it concludes that the FGS helped the Hungarian economy extricate itself from the downward spiral of the credit crunch.

Keywords: Credit crunch, Unconventional Monetary Policy, Funding for Growth Scheme

JEL Classification: E44, E58, G01, G21

Suggested Citation

Balog, Adam and Matolcsy, György and Nagy, Marton and Vonnak, Balazs, Credit Crunch in Hungary between 2009 and 2013: Is the Creditless Period Over? (November 10, 2014). Financial and Economic Review, Vol. 13, Issue 4, pp. 11-34, 2014, Available at SSRN: https://ssrn.com/abstract=2756954

György Matolcsy

Magyar Nemzeti Bank ( email )

Szabadsag ter 8-9
Budapest, H-1850
Hungary

Marton Nagy

Magyar Nemzeti Bank ( email )

Szabadsag ter 8-9
Budapest, H-1850
Hungary

Balazs Vonnak

National Bank of Hungary ( email )

Szabadsag ter 8-9
Budapest, H-1850
Hungary

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