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Looking back to the global financial crisis of 2008–2009, Hungary was among the first countries to be forced to make use of financial assistance from the EU and the IMF. The government, the MNB (the central bank of Hungary) as well as the domestic and foreign analysts cited the high public debt and the volume of unsecured foreign-currency loans as the main reasons for the crises. Though these were real weaknesses, this diagnosis was false as much as the following treatment. First and foremost, it was the inadequate level of foreign exchange reserves that made Hungary to request outside financial assistance.

The excessive fiscal tightening urged by the MNB only led to deepening of the crises. In general, the macropolicy – both fiscal and monetary policy – before, during and after the crises turned out to be painfully pro-cyclical. Due to the lack of sufficient reserves, the MNB became virtually powerless to intervene and could only watch from the side-lines as events unfolded. The orthodox mind-set after replenishing the forex reserves prevented it from implementing a broad scale of unconventional measures to ease the crises. The fiscal authority lost its capacity long before to reduce the severity of the crises. Thus, the excessive and incorrect structure of fiscal correction coupled with an unjustified orthodox monetary policy, the contraction of the Hungarian economy went much beyond the inevitable amount.

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. Economic and Social Review , 21 ( 4 ): 337 – 361 . Szczerbowicz , U. ( 2015 ): The ECB Unconventional Monetary Policies: Have They Lowered Market Borrowing Costs for Banks

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Turkey Conference . Ankara, 19–20 October. Rajan , R. ( 2013 ): A Step in the Dark: Unconventional Monetary Policy after the Crisis . BIS Andrew Crockett Memorial Lecture

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, especially in a longer-term perspective. At the beginning of the euro crisis, the introduction of unconventional monetary policy tools was initially limited to maintaining liquidity in the eurosystem and providing long-term financing to EMU banks. Many

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