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Credit crunch in Hungary between 2009 and 2013: is the creditless period over?

Author

Listed:
  • Ádám Balog
  • György Matolcsy
  • Nagy Márton
  • Balázs Vonnák

    (Magyar Nemzeti Bank)

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.

Suggested Citation

  • Ádám Balog & György Matolcsy & Nagy Márton & Balázs Vonnák, 2014. "Credit crunch in Hungary between 2009 and 2013: is the creditless period over?," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 13(4), pages 11-34.
    • Handle: RePEc:mnb:finrev:v:13:y:2014:i:4:p:11-34
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    File URL: http://english.hitelintezetiszemle.hu/letoltes/1-balog-en.pdf
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    References listed on IDEAS

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    Cited by:

    1. András László, 2016. "Impact of the Funding for Growth Scheme on the Hungarian economy," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 15(4), pages 65-87.
    2. Marianna Endresz & Peter Harasztosi & Robert P. Lieli, 2015. "The Impact of the Magyar Nemzeti Bank's Funding for Growth Scheme on Firm Level Investment," MNB Working Papers 2015/2, Magyar Nemzeti Bank (Central Bank of Hungary).
    3. Kolozsi, Pál Péter & Parragh, Bianka & Pulai, György, 2017. "Categorising the Central Bank's Credit Incentive Programs by Targeting and Intensity," Public Finance Quarterly, Corvinus University of Budapest, vol. 62(4), pages 502-523.
    4. Naiborhu, Elis Deriantino & Ulfa, Dhanita, 2023. "The lending implication of a funding for lending scheme policy during COVID-19 pandemic: The case of Indonesia Banks," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1059-1069.

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    More about this item

    Keywords

    Credit crunch; Unconventional monetary policy; Funding for Growth Scheme;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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