Discussions on personal bankruptcy regulations are usually focused on the controversial effects of leniency on society, economy, financial markets, entrepreneurship, and labour supply. However, the methodology of measuring leniency has been limited to one-time legislative changes or some elements of the US personal bankruptcy system. In contrast, we create a composite index of personal bankruptcy legislations. We calculate the composite index for 25 EU countries and the US as a benchmark, validate the results, and rank the countries according to the leniency of their personal bankruptcy systems. We analyse the index scores by region, law origin, and the age of the regime. We conclude that the systems show high heterogeneity and cannot be clustered by region or legal origin assumed based on former studies. However, there is a strong association between leniency and the age of legislation. Results indicate that personal bankruptcy policies in the EU are usually launched as creditor-friendly and are later shifted to a more lenient direction.

At the end of 2014, more than 23% of the foreign currency denominated mortgage portfolio in Hungary was overdue; about 20% was classifi ed as non-performing and the tendency is worsening. In this paper, we propose a solution to effectively reduce the credit and systemic risk inherent to this portfolio -the proposed model can be applied to other mortgage portfolios in trouble as well. The main element of our proposal is income-contingent repayment complemented with effective incentives to motivate debtors to repay their debt. We demonstrate that the proposed scheme is attractive for both the debtors and the lenders; therefore, contrary to some recent policy measures, in this case there is no need for direct state intervention to force modifi cations to the existing legal contracts. In order to evaluate the possible effects, we simulated a realistic population of borrowers with different age, debt, loan-to-value, and income. Then we calculated the expected income paths, the repayments of the borrowers as well as the profi t of the lenders on the basis of the non-performing FX mortgage portfolio. The results underpin that the proposed scheme creates signifi cant value added and, most importantly, that it can effectively reduce the vulnerability of the entire economy to future shocks.

Young companies with growth opportunities face serious problems when it comes to financing. The private venture capital (vc) market fails to provide sufficient funding for this segment. First, we present the main characteristics of start-up companies and market failures that can lead to government intervention. These failures include asymmetric information embodied in the business plan; high transaction costs of the investment process from the investment decision to the exit; and positive externalities in the economy, as the government prefers other goals than profit realization. Government participation is categorized as direct or indirect intervention. We present international studies showing that indirect government intervention can have both beneficial and negative effects on the vc market. Finally, the Hungarian government's participation and intervention are evaluated on the domestic vc market.

Islamic Finance receives more attention due to the growing need for financial services in countries with a Muslim population. However, the rules of Islam and its applications in daily life cause conflicts in today's conventional financial system. Since interest gains are prohibited in Islam according to the Quran, Islamic banks develop and use interest-free methods, unlike the conventional banking system. Islamic Finance introduced profit-sharing ratios to replace interest rates and to increase the participation of religious investors in the financial system. In this research, we compare interest rates with profit-sharing ratios in the Turkish banking market. We use wavelet and historical correlation analysis as a new methodology in evaluating the association between these two factors. Although it is presumed that Islamic banks operate as interest-free banks, our analysis confirms former studies and finds that profit-sharing ratios are highly correlated and coherent with interest rates in Turkey. We also find small differences among Islamic banks on how quickly profit-sharing ratios follow the market interest rate changes.