HBLF Finance Target Group has identified two subjects which it wants to deal with in the near future. First, we believe that the euro conversion, whenever that will happen, is going to have many important aspects, technical or other, which are not at all dealt with yet. Beside IT, accounting and logistical issues, we would mostly concentrate our work on awareness raising (both for financial institutions and the public) and customer education concerning long maturity assets and liabilities. Examples include 10-15 year fixed interest HUF loans, investments, pension promises in HUF, etc.

The National Bank of Hungary has started this work already and put together the first documents, which they are about to discuss with the Ministry of Finance and then with PSZÁF. We have had a useful discussion with László Balogh, the leader of this project.

Our aim is to help the relevant institutions to efficiently broadcast their messages. We tentatively agreed that in spring 2007 we could organise a conference, where speakers would raise the issues and start conveying the message that there are many open questions and things to deliver in the coming years. We do not think the timing is too early, as for instance investing in IT, or taking out a long term HUF loan are already such actions today which will be affected by conversion. Therefore business decision makers, and the general public, ought to be aware of this ascpect. HBLF’s role, where the organisation has experience, could be to facilitate the start of such discussion among many relevant parties.

The second topic we have raised is responsible lending and the Equator Principles. The Equator Principles are a set of guidelines launched in 2003 by the largest global banks to promote a transparent and uniform set of environmental and social criteria for large-scale project lending (over US$ 10 mn). The Principles are rooted in the signatories’ recognition that they have a role to play in ensuring responsible corporate behaviour through their lending activities, and a desire to ensure minimum standards for all lending institutions. The Principles use the International Finance Corporation’s environmental and social screening criteria for project loans as their starting point. In October 2006, there were 41 signatories to the Principles, covering almost 80% of commercial banks worldwide. Although several of the multinational banks operating in the region have adopted the Principles, there are currently no Central or Eastern European (CEE) signatories.

To raise awareness about the Principles, the Finance Target Group of the HBLF is planning a half-day seminar for early 2007. The seminar would target senior executives and project finance professionals, and be co-hosted by the Hungarian Banking Association. The seminar would include a presentation by a representative from an Equator Principles expert.

Our most active members in the recent few months have been János Müller, Natasha Landell-Mills, Gergely Mikola and David Thompson. Other members, who participated at one or two occasions, or indicated their interest, have been: Zsuzsa Fekete, Adrienne Pór, Linda Szabó, Marianna Cs. Tóth, János Kuhn and Ildikó Adamecz Rajné.

Board Member
Target Group Leader

Istvan Havas

Ernst & Young