NEW ELEMENT IN POSTABANK CASE

In the spring of 1997, when it became obvious that there were serious problems in Postabank, the financial leaders wanted to support the capital position of the bank with the help of state-owned shareholders. This method proved entirely ineffective and was widely criticized within the government.

The Horn government worked out an original solution early in 1997 when Péter Medgyessy, now Prime Minister was the Minister of Finance to settle the problems of Postabank. Behind the originally HUF 11 billion, later HUF 12 billion state guarantee state-owned shareholders were collected, in fact obliging them to safeguard the bank. The idea of the Ministry of Finance was not too popular with the shareholders. At the Ministry Csaba László (now Minister of Finance) was undersecretary, Tibor Draskovics, now cabinet chief of PM Medgyessy was administrative state secretary . The owners of the bank who had no state background would not take part in the consolidation as they did not see any guarantees in the Princz-management for a prudential functioning. So the state-owned shareholders had to sign guarantees for the double of their own share in the capital.

Translated by Péter Szentmihályi Szabó