The National Bank of Hungary: Hungary prepared for Brexit effects

Budapest, June 24 (MTI) – The National Bank of Hungary (NBH) has prepared for both outcomes of the British vote on European Union membership, NBH managing director Dániel Palotai told MTI on Friday after UK voters decided to leave to bloc at a referendum.

“We continuously monitor the reactions of financial markets,” Palotai said on the sidelines of a conference. “We have all the necessary tools to ensure financial stability,” he said. Economy Minister Mihaly Varga said earlier in June that the UK’s exit from the EU could slow Hungary’s GDP growth rate by 0.3-0.4 percentage points.

The Hungarian Banking Association said that the bank sector has already started developing emergency action plans before the referendum and banks will now analyse the long-term effects and strive for a managed transition. “On behalf of the bank sector, we can assure private clients and companies that banking services will continue as usual,” it said in a statement.

An expert told public news channel M1 on Friday morning that “earthshattering changes” were ahead in wake of the leave vote, with a level of uncertainty similar to “diving head on into darkness”. Zoltán Galik, a professor at Corvinus University, said early elections would soon be called in the UK, to be potentially followed by a Scottish or even a Northern Irish referendum on leaving the UK. The British referendum is a warning for European elites that a small party such as UKIP was able to win the vote with “a campaign based on emotional topics such as immigration and the promise of old-style sovereignty,” he said.

A state secretary at the economy ministry said the changes will affect Hungary, Europe and the whole world and banking and corporate sectors will both have to “go through renewal”.

Reuters reported early Friday morning that according to nearly complete results 51.8 percent of UK voters backed leaving the EU while 48.2 percent voted to remain.

Photo: MTI/EPA/Ennio Leanza

Source: mtva.hu