Contacts: In Washington: Michael Jones (202) 473 – 2588 mjones2@worldbank.org
WASHINGTON, September 22, 2009 - The World Bank’s Board of Executive Directors today approved the Financial Sector and Macro Stability Loan for Hungary in the amount of Euro 1.0 billion (US$ 1.40 billion). This loan has been prepared as part of an international support package financed jointly by the International Monetary Fund, the European Commission, and the World Bank. Hungary had requested support last October in the amount of Euro 19.8 billion from international financial institutions to provide a cushion and address the fiscal and macroeconomic imbalances exacerbated by the global financial crisis. The goal of this loan is to support the Government’s fiscal reform and financial stability programs aimed at insuring fiscal sustainability and a sound financial sector. “Hungary was one of the first emerging economies hit by the global financial crisis,” said John Pollner, World Bank Team Leader for this Project. “The Government has made an impressive effort to cope with crisis impacts, achieve fiscal sustainability, strengthen the financial sector, and restore investor confidence as evidenced by a recent successful international bond issue and the lowering of spreads.” The overall objective of the project is the support the Government’s fiscal reform and financial stability programs. This will be achieved through (a) support to fiscal reforms to ensure long-term fiscal and macroeconomic sustainability and restore investor confidence, improving access to external funding by the government, banks, and the private sector; b) support to the financial sector program to maintain adequate levels of capital and liquidity in the banking system; c) support to pension reforms to improve the funding sustainability of the pension system and the payout design of the private pillar; and d) support to health sector to reduce costs and ensure access to healthcare. The reform program supported by the loan will be implemented by the Ministry of Finance of the Republic of Hungary in collaboration with the National Bank and the Hungarian Financial Supervisory Authority. The loan will be disbursed in two equal tranches. For more information about the World Bank in Hungary, please visit http://www.worldbank.org.hu |
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