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Domestic co-operation

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Beyond the stipulation of independence, the MNB is obliged to cooperate with the government in many areas. Pursuant to the Central Bank Act, the MNB must be consulted in relation to decisions and draft legislation concerning the duties of the MNB and the function of the financial system, the minister of finance is required to inform the bank in advance of budget proposals and the MNB is entitled to send its opinion on these to the government and put forth its such views to the competent committee of Parliament. In addition, the agenda of the monetary council must also be sent to the government; the governor of the central bank may attend government meetings where matters concerning the MNB are discussed, and a government representative may also attend the meetings of the Monetary Council.

As an additional area of cooperation between the MNB and state administration, the central bank manages the Unified Treasury Account and other government accounts designated by the minister of finance.

Beyond the above responsibilities, the MNB is obliged to cooperate with Parliament, as the governor of the central bank is required to report on monetary policy. Of course, the MNB also maintains close ties to the State Audit Office, as the State Audit Office is its principal supervisory organ.

The Hungarian Financial Supervisory Authority (HFSA), the Ministry for National Economy (MNE) and the Magyar Nemzeti Bank are the most important Hungarian organisations responsible for the establishment and maintenance of financial stability. Accordingly, the cooperation of the central bank on a domestic level basically means close ties and the exchange of information with these two organisations. The Financial Stability Board functions as an important cornerstone of such cooperation. The trilateral Financial Stability Board is responsible for ensuring the stability of the financial intermediary system, the coordination of the efficient micro and macro level prudent supervision, monitoring and regulation of the sector.

In cooperation with the HSFA, one of the key domestic partners of the central bank, it continuously analyses the credit institutions, bank groups and market segments determining the stability of the financial system. In connection with the above, both institutions make available to each other information required for their respective tasks, and in some areas data is collected only by one organisation, and supplied to the other, for the purpose of reducing the cost of statistical data provision. This cooperation is regulated by a bilateral agreement.

It follows from the above that the cooperation of the MNB with the Ministry for National Economy is closest in the area of legislation. The central bank plays an active role in working out the regulation policy concept of the financial intermediary system, the institutions and markets, analyses the impact of central bank measures and external regulatory changes on the activities of financial institutions.

In addition to authorities and government organisations, the MNB maintains close ties with domestic financial institutions (predominantly with credit institutions, due to their key role in the financial institutional system) and their organisations, and organisations operating the financial infrastructure.

The professional associations play an important role, such as the Hungarian Banking Association, the Hungarian Leasing Association, the National Federation of Savings Co-operatives, the Association of Hungarian Investment Fund and Asset Management Companies, the National Association of Securities Dealers and the Association of Hungarian Insurance Companies. These partnerships are also reflected by cooperation agreements: The Magyar Nemzeti Bank concluded a cooperation agreement with the Hungarian Banking Association in June 2008 in connection with the HunOR Hungarian Operational Risk Database. On 15 May 2008, the MNB and the Hungarian Leasing Association concluded a cooperation agreement in the framework of which they mutually provide technical information in relation to the Hungarian economy and the leasing market, cooperate in issues affecting the leasing market and work to improve the standard of the Hungarian financial culture.

For the purpose of performing its stability related tasks, the MNB directly takes part in the management (board of directors, supervisory board) of companies operating the financial infrastructure, such as Central Clearing House and Depository Ltd. and GIRO Ltd. In addition, owing to their role assumed in maintaining the stability of the financial institutional system, the MNB maintains close ties with the National Deposit Insurance Fund of Hungary (the deputy governor of the MNB is a member of the board) and the Investor Protection Fund.

Beyond the stipulation of independence, the MNB is obliged to cooperate with the government in many areas. Pursuant to the Central Bank Act, the MNB must be consulted in relation to decisions and draft legislation concerning the duties of the MNB and the function of the financial system, the minister of finance is required to inform the bank in advance of budget proposals and the MNB is entitled to send its opinion on these to the government and put forth its such views to the competent committee of Parliament. In addition, the agenda of the monetary council must also be sent to the government; the governor of the central bank may attend government meetings where matters concerning the MNB are discussed, and a government representative may also attend the meetings of the Monetary Council.

As an additional area of cooperation between the MNB and state administration, the central bank manages the Unified Treasury Account and other government accounts designated by the minister of finance.

Beyond the above responsibilities, the MNB is obliged to cooperate with Parliament, as the governor of the central bank is required to report on monetary policy. Of course, the MNB also maintains close ties to the State Audit Office, as the State Audit Office is its principal supervisory organ.

The Hungarian Financial Supervisory Authority (HFSA), the Ministry for National Economy (MNE) and the Magyar Nemzeti Bank are the most important Hungarian organisations responsible for the establishment and maintenance of financial stability. Accordingly, the cooperation of the central bank on a domestic level basically means close ties and the exchange of information with these two organisations. The Financial Stability Board functions as an important cornerstone of such cooperation. The trilateral Financial Stability Board is responsible for ensuring the stability of the financial intermediary system, the coordination of the efficient micro and macro level prudent supervision, monitoring and regulation of the sector.

In cooperation with the HSFA, one of the key domestic partners of the central bank, it continuously analyses the credit institutions, bank groups and market segments determining the stability of the financial system. In connection with the above, both institutions make available to each other information required for their respective tasks, and in some areas data is collected only by one organisation, and supplied to the other, for the purpose of reducing the cost of statistical data provision. This cooperation is regulated by a bilateral agreement.

It follows from the above that the cooperation of the MNB with the Ministry for National Economy is closest in the area of legislation. The central bank plays an active role in working out the regulation policy concept of the financial intermediary system, the institutions and markets, analyses the impact of central bank measures and external regulatory changes on the activities of financial institutions.

In addition to authorities and government organisations, the MNB maintains close ties with domestic financial institutions (predominantly with credit institutions, due to their key role in the financial institutional system) and their organisations, and organisations operating the financial infrastructure.

The professional associations play an important role, such as the Hungarian Banking Association, the Hungarian Leasing Association, the National Federation of Savings Co-operatives, the Association of Hungarian Investment Fund and Asset Management Companies, the National Association of Securities Dealers and the Association of Hungarian Insurance Companies. These partnerships are also reflected by cooperation agreements: The Magyar Nemzeti Bank concluded a cooperation agreement with the Hungarian Banking Association in June 2008 in connection with the HunOR Hungarian Operational Risk Database. On 15 May 2008, the MNB and the Hungarian Leasing Association concluded a cooperation agreement in the framework of which they mutually provide technical information in relation to the Hungarian economy and the leasing market, cooperate in issues affecting the leasing market and work to improve the standard of the Hungarian financial culture.

For the purpose of performing its stability related tasks, the MNB directly takes part in the management (board of directors, supervisory board) of companies operating the financial infrastructure, such as Central Clearing House and Depository Ltd. and GIRO Ltd. In addition, owing to their role assumed in maintaining the stability of the financial institutional system, the MNB maintains close ties with the National Deposit Insurance Fund of Hungary (the deputy governor of the MNB is a member of the board) and the Investor Protection Fund.