in the Austrian capital to mark the initiative’s 10th anniversary. There is much to celebrate: It saved Europe from a devastating banking collapse and helped to manage risks during the eurozone crisis.
Foreign banks in Hungary and elsewhere became objects of hate and loathing during the financial crisis. Urged on by the banks’ over-eager financial advisers, citizens rushed to take out loans in euros, dollars, and even yen, and suddenly found themselves with crushing debts when the crisis caused domestic currencies to tumble. When repayments lagged, banks were quick to foreclose on homes, cars and companies. Taxing the banks, as Orbán did, seemed only fair.
This is part of a broader pattern across emerging markets. Most foreign banks intend to continue withdrawing, and those that stay increasingly. Although there are fewer foreign banks, some — especially Russian and Chinese banks — have increased their presence through acquisitions and growth, resulting in greater market concentration.
True, countries outside the eurozone have less protection, but now even they have an anchor, and the Vienna experience has reinforced it. Aswhen he stepped down as the EU’s commissioner for the internal market and services, the Vienna Initiative “has now become part of the European financial architecture”.
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