Hungary seeks to demote bank chief

Hungary seeks to demote bank chief

BUDAPEST - Agence France-Presse
Hungary’s government aims to demote the head of the central bank in a merger with the financial regulator, as concerns increase about growing government control over state institutions.

An amendment to the constitution, tabled by the constitutional committee late Wednesday, foresees the creation of a new body to be headed by a figure appointed by President Pal Schmitt and put forward by Prime Minister Viktor Orban.

The current head of Magyar Nemzeti Bank (MNB), the central bank, Andras Simor, would then become deputy head of the new institution along with the current chief of the Financial Supervisory Authority.
The parliament, dominated by the premier’s center-right populist Fidesz party, was set to vote on the committee’s proposal on Friday.

Long-lasting dispute

“The proposal of the constitutional committee is nothing but a re-staffing proposal hidden in a structural change idea,” said Gergely Barandy, an opposition socialist member of the Fidesz-dominated committee.

The government had already amended the rules of the appointment procedure of the rate-setting Monetary Council members in March, depriving Simor of his right to influence who the external members would be.

Orban’s government has repeatedly castigated the central bank for its monetary policies which it said went against the government’s goal of boosting growth.

In March, Simor said he refused to give in to what he called “bullying” by the government to leave his post before the end of his mandate in March 2013.