Reform of the Hungarian corporate insolvency regulation and its financial stability aspects

Corporate insolvency regulation is of decisive relevance for banks in terms of their secure operation and ability to recover outstanding claims from corporate clients. This topic has been the subject of many debates lately, as Hungarian corporate insolvency regulation has been undergoing reforms since 2003. One of the main objectives in this regard was to adopt new measures to improve the mediation of funds in the economy. This study introduces reviews leading to the reform, demonstrates the measures already adopted and those in the pipeline, and finally offers an assessment of the measures in general and from the perspective of financial stability. Reform measures adopted so far are favourable from the perspective of financial stability, since the international standards which have been introduced improve the secure operation of commercial banks when mediating funds. However, the reform has to be carried on, with special regard to the enhanced creditor protection temporary administrators and liquidators must be enabled to protect the interests of creditors in any situation and creditors should be afforded means to enforce it.