The Structural Outline of the Development and Consolidation of Retail Foreign Currency Lending

The present essay presents the development of the exaggerated foreign currency borrowing of Hungarian households, as well as its sphere of responsibility and consequences. It touches on the consolidation processes that started in 2010, one of the main results of which was that the government of Hungary and the National Bank of Hungary (which implemented a new type of monetary policy as of 2013) saved hundreds of thousands of families from financial collapse. Across the world, as such in Hungary as well, neoliberal economic policy turned to high-risk loans to compensate for its low efficiency and in fact in order to maintain its status, it also employed bank regulation instruments that allowed for the population to become overly indebted. The loan disbursement exceeding the population’s solvency stems from the efforts to bridge the regime change that failed to bring economic-income convergence, as well as the globalisation of over-lending techniques that developed on the international stage and also reached Hungary.