Hungary's Central Bank Welcomes Amendments to Banking Law
The Hungarian National Bank announces its support for legislative changes aimed at enhancing institutional transparency and focusing on core tasks.
The Hungarian National Bank (MNB) has expressed its approval of amendments to the banking law submitted earlier this week.
In a press release, the MNB stated that the modifications will allow the central bank to concentrate solely on tasks defined by law, reinforcing its commitment to transparent and effective operations.
Finance Minister Mihály Varga initiated a review of the bank's foundations in a letter to the Prime Minister in March, an effort that the MNB has supported.
The bank indicated that the amendment significantly improves institutional transparency and contributes to the rationalization of its operations.
According to the proposed legislative changes, the Hungarian National Bank will no longer be able to establish asset management foundations.
Furthermore, any foundations established by the MNB will not be permitted to conduct investment, asset management activities, or engage in other financial transactions.
Varga, recently appointed as the new central bank governor, discussed the need for a 'profile clean-up' in mid-April, suggesting that legislative changes would narrow the central bank's powers to basic functions, effectively leading to the abolition of asset management foundations.
The draft legislation was presented to the Economic Committee of the National Assembly on Tuesday morning, just two hours before the session.
The objective of the proposed law is to ensure that the central bank can perform its fundamental and statutory duties as effectively as possible, hence the need to reduce activities that fall outside of legal mandates.
In related developments, in March, the State Audit Office published three extensive reports totaling over 600 pages, which are largely connected to the central bank.
These reports covered:
- The operations of the Pallas Athéné Domus Meriti Foundation (PADME);
- Investments made by the Neumann János University Foundation;
- The operational compliance of the MNB, including costs related to the renovation of its headquarters.
The report on PADME's operations received significant attention, particularly following the independent media's long-standing investigations into the problematic management of the MNB's foundations.
Two days before the official report was released, on March 17, a media outlet reported on the draft findings, highlighting severe deficiencies identified by the State Audit Office, along with decisions that resulted in substantial losses affecting the management of several hundred billion forints in foundation assets.
The report indicated that approximately 200 billion forints had been lost due to various real estate transactions linked to the MNB foundations.
In a press release, the MNB stated that the modifications will allow the central bank to concentrate solely on tasks defined by law, reinforcing its commitment to transparent and effective operations.
Finance Minister Mihály Varga initiated a review of the bank's foundations in a letter to the Prime Minister in March, an effort that the MNB has supported.
The bank indicated that the amendment significantly improves institutional transparency and contributes to the rationalization of its operations.
According to the proposed legislative changes, the Hungarian National Bank will no longer be able to establish asset management foundations.
Furthermore, any foundations established by the MNB will not be permitted to conduct investment, asset management activities, or engage in other financial transactions.
Varga, recently appointed as the new central bank governor, discussed the need for a 'profile clean-up' in mid-April, suggesting that legislative changes would narrow the central bank's powers to basic functions, effectively leading to the abolition of asset management foundations.
The draft legislation was presented to the Economic Committee of the National Assembly on Tuesday morning, just two hours before the session.
The objective of the proposed law is to ensure that the central bank can perform its fundamental and statutory duties as effectively as possible, hence the need to reduce activities that fall outside of legal mandates.
In related developments, in March, the State Audit Office published three extensive reports totaling over 600 pages, which are largely connected to the central bank.
These reports covered:
- The operations of the Pallas Athéné Domus Meriti Foundation (PADME);
- Investments made by the Neumann János University Foundation;
- The operational compliance of the MNB, including costs related to the renovation of its headquarters.
The report on PADME's operations received significant attention, particularly following the independent media's long-standing investigations into the problematic management of the MNB's foundations.
Two days before the official report was released, on March 17, a media outlet reported on the draft findings, highlighting severe deficiencies identified by the State Audit Office, along with decisions that resulted in substantial losses affecting the management of several hundred billion forints in foundation assets.
The report indicated that approximately 200 billion forints had been lost due to various real estate transactions linked to the MNB foundations.
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