The regulatory regime applicable to banks
Banking business in Hungary is regulated by the Banking Act. The Banking Act sets out in a codified form the Hungarian law regulating the provision of banking and financial services, and implements the Basel III measures, the Capital Requirements Directive (CRD IV) and Regulation (CRR) into Hungarian law.
Most banks are financial institutions or specialised financial institutions (such as mortgage credit institutions). Two major banks were acquired by the state or state-owned entities in 2014. There are a number of subsidiaries of foreign banks (including Austrian, Italian and German banks). Some large international financial institutions also operate a branch in Hungary. In principle, the local conduct of business regulations also apply to branches, while prudential regulation is the responsibility primarily of their home regulators. The offering of cross-border services (without having a physical presence in Hungary) by banks regulated in a Member State of the European Union is also widespread, in particular in the corporate and interbank sectors.