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|Date of Introduction of<br>lhepaymentsystem<br>**land**avernge delay in<br>ettlingabankcheque|1988 and takes 10<br>**days**|1990andtakea<br>between 10and<br>20 days|_<br>_<br>1991andtakes<br>about 3 days|_<br>_<br>1991**and takes**<br>between 15 and 20<br>days|<br>1992 and**takes**<br>between 15 and<br>21 days|
|---|---|---|---|---|---|
|**Remnoval**<br>of banks bad<br>!,%ana<br>and/or<br>r.capializationof<br>**bankb**<br>**using**fiscal<br>leources,|Yes, 50 percent of<br>threeLargest<br>banks<br>nonperforming<br>loans<br>inherited in 1987,<br>which accounted for<br>1.7percent of total<br>SOEsloansby<br>end-1987.|Yes, banks'<br>foreign exchange<br> <br>losses were<br>covered in 1991<br>and a new bank<br>recapitalization is<br>being considered<br>in 1993.|Yes, 30 percent of<br>all outstanding<br>loans to the<br>enterprisesectorin<br>January 1991.|Yes, 100 percent<br>of enterprises<br>loansiuanding<br>at end-1990 were<br>gusrarteed by the<br>state.|Yea, 90 percent<br>ofallenterprise<br>nonperforning<br>loans outsanding<br>in December<br>1990.|
|Auditswere used to<br>dletrtmined<br>amount of<br>ecapitalizations|Yes|Yes|No, based on<br>banks' own<br>assessment|No, based on totAl<br>loans granted in<br>end-1990|No|
|Instrun**-it**for<br>removingbanks' bad<br>loans and/or<br>recApitalizingbanks|government<br>guarantees callable<br>upon the initiation<br>of liquidation<br>procedures.|government bonds<br>denorninated in<br>foreign currency;<br>and for the new<br>recapitalization<br>15-vears<br>government bonds<br>includingSyears<br>of grace|Nonperforming<br>loans were<br>transferred to the<br>Consolidation<br>Bank and<br>govemment honda<br>were issued for<br>recapitalizing<br>banks|government<br>guarantees and<br>bonds|Proposed to be<br>4-year<br>government<br>bonds.|
|Amountof<br>nonperfromingloans<br>coveredby the budget|Pt 10.5 bn in<br>government<br>guarantees or 1.7<br>percent of total<br>banks' loans<br>outstanding with<br>enterprises by<br>end-1987|<br>USS 5.5 bn in<br>dollar-denominate<br>d government<br>bonds issued to<br>finance the<br>foreign exchange<br>losses; and an<br>undetermined<br>amount for the<br>new bank<br>recapitalization<br>scheme.|Kcs 120 bn of<br>banks<br>nonperformning<br>loans were<br>transferred to the<br>Consolidation<br>Bank and ,in<br>addition, a transfer<br>of Kcs 50 bn was<br>made for covering<br>enterprises'<br>nonperformiing<br>loans and for<br>recapitalizing<br>banks.|Lev 4.1 bn in<br>government bonds<br>**and**the<br>government<br>provided<br>guaranteed on toe<br>Lev 46 bn bank<br>outstanding in<br>end-1990.|Lei 150 bn in<br>banks<br>nonperforrning<br>loans, Lei 50 bn<br>for bank<br>recapitalization.|
|Link bank<br>recapitalization to<br>enterpriseprivatization|Yes, indirectly|Yes, directly|Yes, indirecUy|Yes, directly|No|
|Link bank<br>recapitalization<br>to bank<br>privatization|No|No|No<br>_|No|No|
|Do banks have to<br>approve enterprises in<br>armarears,eitfitiorhno<br>plans?|Yes|Yes, in the new<br>scheme|Yes|No|No|
|Enterprise privatization<br>involved a giveaway<br>scheme.|Subsidized loans<br>have been offered to<br>nationals purchasing<br>shares|Yes, the Mass<br>Privatization|Yes, the Voucher<br>Scheme|It is being<br>considered<br>I I I I|Yes,**similar**to<br>Poland**and**<br>CSFR's**schemes**<br>usingprivate<br>investment funds.|

Source: World Bank (1992), Demekas and Khan (1991) , OECD (1991), The National Bank of Hungary (1991) and Thorne (1992).