The package will provide eligible credit institutions with new capital and guarantees on short and medium term newly issued debt, under strict conditions.
The Commission approved the Hungarian package to stabilise the markets as a response to the global financial crisis. The package will provide eligible credit institutions with new capital and guarantees on short and medium term newly issued debt, under strict conditions.
The package includes two measures designed to stabilise the financial markets:
Ø a recapitalisation measure, making available new capital to credit institutions in exchange for preferential shares, to enable them to strengthen their capital base against potential losses. The State can purchase preference shares, which are considered as tier 1 capital, until 31 March 2009. The measure is fully in line with the Commission guidance on bank recapitalisation.
Ø a guarantee measure covering, against remuneration, new debt with a maturity of up to three years (or five years in duly justified cases), issued before 30 June 2009. Subordinated debt and interbank deposits are excluded from the scheme. The remuneration is aligned on the recommendations of the European Central Bank (ECB).
Press release
© European Commission
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