Famous last words
Friday, March 6th, 2009
It’s a truism among money market mavens that any bank that has to proclaim its health is almost dead.
So it is with great sadness that I read this story tonight, datelined 03.05.09, 05:56 PM EST.
Hungary cbank, regulator say bank system stable
BUDAPEST, March 5 (Reuters) – Hungary’s central bank (NBH) and financial market regulator PSZAF said on Thursday that the financial situation of banks in Hungary was stable and bank clients’ money was safe.
‘The Hungarian central bank and PSZAF are closely monitoring the situation of banks,’ the bank’s spokeswoman Nora Hevesi and PSZAF spokesman Istvan Binder told Reuters.
‘The financial situation of the Hungarian banking system is stable, the money of depositors is in safety,’ they added.
The forint, having traded at 300 to the Euro just a week ago and having closed today in Budapest at 309 to the Euro is at 315 tonight.
Make that 316.
I got to know Andras Simor, the guy who today runs Hungary’s central bank, in the 1990s when I was living in Budapest and writing about business in the former Soviet bloc. Simor ran the securities arm of Creditanstalt Securities and was always generous with his insights.
Simor is in a tough spot now, because every currency speculator in the world is trying to bludgeon the IMF’s $15.7 billion loan out of his vaults and into their own wallets.
A devaluing forint hurts Hungarians who’ve borrowed avidly in Euros and Swiss Francs. And it puts great pressure on the banks in Europe (Creditanstalt being high on the list) who have loaned this money. The dominoes are tumbling.
(For Blogads’ business partners, it’s worth noting that this craziness is benign: Hungary’s tailspin means Budapest staff get paid more in local terms and we can hire more great programmers.)