Central Banks

Thursday, December 22, 2011 - 09:28

ECB: Concerned About Independence Of Hungarian Central Bank

FRANKFURT (MNI) - The European Central Bank has expressed concern over a recent draft law in Hungary that it says would undermine the independence of the country's central bank, the ECB said in a press statement published on Thursday.

Earlier this month, the Hungarian government, without consulting the ECB, introduced proposals to merge Magyar Nemzeti Bank with the Financial Supervisory Authority, appoint a new president above the current central bank governor and increase the number of members of the governing council, all of which would be "to the detriment of central bank independence," the ECB said.

"In particular, by appointing a new President with authority over the Governor of the MNB, who would become the Vice-President of the new institution, the personal independence of the MNB's Governor would be impaired and Article 14.2 of the Statute of the European System of Central Banks concerning the possible reasons for dismissing the Governor of a national central bank would be breached," the ECB's statement said.

"The Governing Council of the ECB has requested the Hungarian authorities to bring their consultation practice into line with the requirements of European Union law and to respect the obligation to consult the ECB. Three major revisions of the central bank law in 18 months are incompatible with the principle of legal certainty."

-- Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com --

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