Who is to blame for the credit crunch?


Although the following post is meant for home saving, I think it is an exciting topic. Who is responsible for the large number of defaulted loans? Who should stand for a loan rescue account?

Banks are scolded for putting credit on poor deceived people.

There is also a reason to condemn people, many of whom have been indebted for 30 years with full financial illiteracy and a pocket of debt.

What I want to write about now is the role of the state in the crisis that has developed. This is the least to say, though as guilty as the other two actors of this tragedy.

Increased demand was most severely generated by state subsidies and guarantees.

In the fortunate nesting program


The state has given a guarantee to low-income citizens that the otherwise completely insolvent masses will be able to buy their dream dream home for as much as 10%.

(Left) Luckily, they did not even have the required 10% of their own resources, because “socpol”, “semi-socpol” and “advance social”, that is, the non-refundable subsidy received from the state for (future) children.

What was the result of this? Masses started buying homes that could not even raise one million forints in 10 years, which means they did not save eight thousand forints a month. Not a single client started buying a home with the perfect zero, even the lawyer’s expenses were covered by a personal loan.

This mass represents the bulk of the debtors now in trouble


For those who do not have a few monthly reserves are guaranteed to be in trouble for 25-30 years, even without a crisis, as there are few lucky people who can say that they have never lost their job in 25 years or have been paid long-term sick leave.

It was stupid of the state to chase these people into the false illusion of home ownership.

The introduction of State interest rate subsidies was equally a mistake. The state spent (and still does) more than HUF 200 billion on taxpayers’ money to support the interest of the creditors.

Let’s face it a bit: without VAT, the state could build 20,000 pieces of housing each year with this amount of money. That is, over a 10-year period, 200,000 homes, which would provide a perfect solution for all those in need and the current credit crunch would be much smaller.

But let us not go against the MNB’s monetary policy either. In 2001, the National Bank introduced the Inflation Targeting Policy, which essentially sets itself an inflation target and blindly disregards all monetary policy with that objective in mind.

The result? He had never even approached the target of 3-4%, but had no visible result in this endeavor, but raised the base rate to the sky. This resulted in two things: Forint loans became priceless, everyone was in foreign currency debt, as forint loans were up to 10% higher than Swiss franc-based loans.

Another result was that the high base rate attracted foreign hot capital


which led to the overvaluation of the forint, which again sealed the fate of foreign currency debtors, as most of them were indebted to the strong forint and now the monthly installments were higher due to the weakening forint. The Czech Republic escaped this trap, barely finding any foreign currency loans, and even in the worst crisis, the state was able to finance itself at 4-5%.

The attitude of the HFSA, who did not raise his voice vigorously against the ongoing processes, deserves special mention. It took substantive steps to regulate the credit market only after the outbreak of the crisis, after a real rain in the mantle style.

Personally, I do not share the view of the state that mortgage debtors should be saved at all costs, because it is precisely the taxpayers who acted responsibly and did not jump into a loan for their power. The situation should be clarified so that those who were not even creditworthy at the time they took out the loan would lose what was never theirs. Saving the rest will also be a serious argument for taxpayers.

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