Hungarian Central Bank Governor Supports Legislation Against Foundation Creation
Varga Mihály advocates for proposed law restricting asset management foundations following scrutiny from auditors.
Varga Mihály, the Governor of the Hungarian National Bank (MNB), expressed his support for a proposed legislative amendment that would prohibit the establishment of asset management foundations associated with the central bank in the long term.
Varga emphasized that the MNB, under its new leadership, is committed to transparent operations and has initiated discussions with the government, specifically with the Prime Minister, to implement this law.
The proposed modifications to the central bank law have been presented by the economic committee of the parliament, with Varga stating that this legislation would provide a framework for the MNB moving forward, which has been welcomed by him and his team.
In March, the State Audit Office released three reports, totaling over 600 pages, relating to the operations of the MNB, including those concerning the Pallas Athéné Domus Meriti Foundation (PADME), the investments of the Neumann János University Foundation, and an examination of the MNB's operational compliance, which included the costs of the bank's headquarters renovation.
The most significant among these was the report on the PADME, which uncovered serious operational issues long noted by independent media.
Two days prior to the official report's release, a media outlet reported that the State Audit Office found significant deficiencies and identified actions that had resulted in substantial financial losses linked to the management of the foundations' assets, reportedly amounting to hundreds of billions of forints.
Varga also addressed the future of the currently operating foundations, stating that hastily liquidating them would be a mistake, potentially leading to substantial losses for taxpayers.
According to him, the MNB's leadership is taking steps to manage public assets optimally to ensure that as much of the taxpayer investment as possible is recovered.
In a related development, Varga was questioned about a podcast series launched by Matolcsy György, the former governor, where he claimed that 80% of the State Audit Office's report on the MNB was false, while 20% was deemed misleading.
Varga noted that he had not seen the podcast and therefore could not or would not comment on it, asserting that it is not the responsibility of the central bank's leadership to address such matters, which fall under the purview of the appropriate authorities.
Varga emphasized that the MNB, under its new leadership, is committed to transparent operations and has initiated discussions with the government, specifically with the Prime Minister, to implement this law.
The proposed modifications to the central bank law have been presented by the economic committee of the parliament, with Varga stating that this legislation would provide a framework for the MNB moving forward, which has been welcomed by him and his team.
In March, the State Audit Office released three reports, totaling over 600 pages, relating to the operations of the MNB, including those concerning the Pallas Athéné Domus Meriti Foundation (PADME), the investments of the Neumann János University Foundation, and an examination of the MNB's operational compliance, which included the costs of the bank's headquarters renovation.
The most significant among these was the report on the PADME, which uncovered serious operational issues long noted by independent media.
Two days prior to the official report's release, a media outlet reported that the State Audit Office found significant deficiencies and identified actions that had resulted in substantial financial losses linked to the management of the foundations' assets, reportedly amounting to hundreds of billions of forints.
Varga also addressed the future of the currently operating foundations, stating that hastily liquidating them would be a mistake, potentially leading to substantial losses for taxpayers.
According to him, the MNB's leadership is taking steps to manage public assets optimally to ensure that as much of the taxpayer investment as possible is recovered.
In a related development, Varga was questioned about a podcast series launched by Matolcsy György, the former governor, where he claimed that 80% of the State Audit Office's report on the MNB was false, while 20% was deemed misleading.
Varga noted that he had not seen the podcast and therefore could not or would not comment on it, asserting that it is not the responsibility of the central bank's leadership to address such matters, which fall under the purview of the appropriate authorities.
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