Adam Banai

• PhD in Finance
• Executive Director at Central Bank of Hungary

A 2020-as évtized elejére jelentősen megnőtt jegybankmérlegekre és az inflációs sokk miatt megemelkedett kamatok jelentette kihívásokra több jegybank a kötelező tartalékráták emelésével és a tartalékkötelezettség után fizetett kamatok csökkentésével reagált. E tanulmány a kapcsolódó elméleti háttér, a rövid történeti kitekintés és a nemzetközi péld...

Several central banks responded to the challenges posed by enlarged central bank balance sheets reported at the beginning of the 2020s and the higher interest rates resulting from the inflation shock by raising reserve requirement ratios and lowering the interest rates paid on the reserve requirement. After providing the relevant theoretical backgr...

One of the important issues of banking today is the role bank branches and online banking solutions play in serving consumers. With the help of a representative Survey of 1,000 adults in Hungary conducted in 2022, we examine how well online and mobile banking solutions can provide a suitable alternative to bank branches. Based on our results, onlin...

Climate change is increasingly acknowledged as a fundamental risk to the stability of the financial system. The linkage between residential mortgage lending and local heatwave projections has hitherto received little attention in the climate finance discourse despite recognition of the detrimental effects of extreme heat on economic output measures...

We investigate the problem of interest rate risk transforming into default risk of adjustable-rate mortgage loans in the EU. Bank regulation is strikingly not neutral in this aspect, it explicitly favors short-duration adjustable-rate loans over long-duration fixed-rate loans in the framework of the gap management. This asymmetry in the regulation...

A globális klímaváltozásból fakadó szélsőségesen meleg időszakok a gazdaság számos területén éreztetik negatív hatásukat. Tanulmányunkban azt vizsgáljuk, hogy az amerikai jelzáloghitelek mekkora része megy a jövőbeni hőhullámoknak leginkább kitett területekre, és milyen jegybanki, felügyelőhatósági lépések mérsékelhetik az ebből fakadó kockázatot....

Extreme heat periods due to the changing climate are having a negative impact on many areas of the economy. In our study, we look at how much US mortgage lending is originated in the areas that are most vulnerable to future heat waves, and what central bank and supervisory authority actions could mitigate the resulting risk. From our results, we se...

We assess the effects of non-repayable subsidies on financially constrained and unconstrained Hungarian SMEs. Using bank queries to the credit registry to identify firms that applied for but did not receive a loan, we show that subsidies generate a sizeable incremental impact on asset growth of constrained firms relative to unconstrained businesses...

We assess the effects of non-repayable subsidies on financially constrained and un- constrained Hungarian SMEs. Using rejected subsidy applicants as control group and bank queries to the credit-registry to identify firms that applied for but did not receive a loan, we show that subsidies generate a sizeable incremental impact on asset growth of con...

The Foucauldian literature on the ‘financialisation of everyday life’ has documented the way neoliberal discourses and practices call forth willing entrepreneurial-investorial and debtor financialised subjects. However, recent qualitative studies on the lived experiences of financialisation suggested that financialised households are often unwillin...

Although EU subsidies aiming at economic development play a pivotal role not only for Hungary but for the entire European Union as well, there is a debate regarding their effectiveness in the literature. This paper investigates the impact of direct economic development subsidies extended in the context of Structural Funds and the Cohesion Fund as p...

This study presents the detailed methodology of generating house price indices for the Hungarian market. The index family is an expansion of the Hungarian housing market statistics in several regards. The nationwide index is derived from a database starting from 1990, and thus the national index is regarded as the longest in comparison to the house...

Housing market is important from a macroprudential perspective because it has a strong effect on the banking sector. Changes in real estate prices may affect the level of bank risk through household mortgage lending, however, the literature has no clear conclusion on this impact mechanism. Using a bank-level database containing quarterly data from...

A pénzügyi közvetítő rendszer akkor tudja betölteni társadalmi funkcióját, ha az általa megvalósított hitelezés támogatja az adott nemzetgazdaság és közösség fenntartható fejlődését. A magyar bankok nem mindig és nem minden szempontból feleltek meg ennek a feltételnek. Az utóbbi egy-másfél évtizedben több olyan banki gyakorlat is azonosítható, amel...

We analyze the relative roles of subsidiary and parent banking group traits in driving foreign banks’ lending patterns in the Central and Eastern European (CEE) region before and during the crisis. We use a bank-level dataset on Western European banking groups and their CEE subsidiaries over the 2002–2013 period. We find that lower capital-to-asset...

Capturing financial network linkages and contagion in stress test models are important goals for banking supervisors and central banks responsible for micro- and macroprudential policy. However, granular data on financial networks is often lacking, and instead the networks must be reconstructed from partial data. In this paper, we conduct a horse r...

We conduct a horse race of methods to reconstruct financial networks from partial data. The various methods are assessed using financial network data obtained from 25 different markets, across 13 different jurisdictions. Our contribution is two-fold. We conduct a cross-country panel analysis of financial networks that sheds new and robust insights...

Late adopters of innovation are more conformist and risk-averse than early adopters (Rogers, 2000). In markets where product risk rises over time, this leads to a conformity-risk paradox: increasingly risky products are acquired by increasingly risk-averse consumers. We show how the paradox contributed to risky mortgage borrowing before the crisis.

In recent years, the average spread on newly extended housing loans above the 3-month interbank interest rate has been consistently higher compared to spreads in neighbouring countries. This paper investigates the reasons behind it by using econometric tools and simple statistical examinations. In our two-step approach, we first identify the determ...

In banking practice, quantifying the probability of default is one of the most important elements of the lending decision, therefore it is also vital from a financial stability perspective. The aim of our research was to model the probability of default as precisely as possible in the case of micro, small and medium-sized enterprises. By linking th...

We analyze the relative roles of subsidiary and parent banking group traits in driving foreign banks’ lending patterns in the Central and Eastern European (CEE) region before and during the crisis. We use a new bank-level dataset on Western European banking groups and their CEE subsidiaries over the 2002-2013 period. We find that the parent bank’s...

This paper analyses the fundamental determinants of the household borrowing decisions in Hungary and Poland, using the Euro Survey data conducted by the Austrian central bank. The previous researches, based on the Euro Survey, are supplemented and enhanced in several respects. It bears utmost importance that instead of using simple ad hoc methods t...

The lending activity of the Hungarian banking system is still subdued six years after the onset of the crisis. We construct a novel panel dataset with data on 11 Hungarian banks from 1999 to 2013 to examine the main bank-specific reasons behind this trend. We find that on a longer horizon, sound funding positions (i.e. loan to deposit ratio) suppor...

The risks of household lending are still a major issue in Hungarian banking. The proportion of non-performing loans is rising continuously. We constructed a model to find those factors which have significant effect on the probability of default of households' mortgages. We also used this model to calibrate the optimal level of household mortgages'...

Several studies have analyzed interbank networks, but to the best of our knowledge, foreign exchange swap (FX swap) markets have not been examined with the tools of network theory. We have made an empirical analysis of the network structure of the Hungarian FX swap market. The network of the FX swap market is a small-world type graph, which also me...

Hungary: “foreign ” and “local ” banks – before and after the crisis

In Hungary in the pre-crisis period, the bank sector-initiated private credit boom significantly contributed to the accumulation of economic imbalances. Nevertheless, before the 2008 crisis no special regulatory measure was taken to mitigate the foreign exchange lending to unhedged borrowers, which was a main moving force of the credit boom. Deprec...