Hungarian and international experts discussed the economy of the future at this year’s Lámfalussy Conference

6 February 2023

This year, the Magyar Nemzeti Bank’s flagship international event, the Lámfalussy Lectures Conference was held for the ninth time. After three years, attendance was in person. Featuring distinguished speakers, the event focused on the increasing interest in central bank digital currencies and the role of central banks in promoting the green economy. At the pre-conference gala, the awards established by the Magyar Nemzeti Bank were presented: the Lámfalussy Award, which aims to recognise internationally outstanding professional achievements influencing international monetary policy, and the Popovics Award, named after the first Governor of the MNB, which is awarded annually to young experts who have accomplished outstanding professional work in economics and finance. In 2023, the Lámfalussy Award was presented to Robert Holzmann, Governor of the Oesterreichische Nationalbank, and the Popovich Award was received by Zsolt Kuti, the MNB’s Executive Director responsible for Monetary Policy, Financial Analysis and Statistics.

On 5 February, the day before the professional programme of the Lámfalussy Lectures Conference starts, the Lámfalussy and Popovics Awards, established by the MNB, were presented. Following the recommendation of the MNB’s professional committee, this year's award bearing the name of the ‘Father’ of the euro was received by Robert Holzmann, Governor of the Oesterreichische Nationalbank. Robert Holzmann was appointed Governor of Austria’s central bank in 2019. Before that, he held high-profile positions in international organisations (World Bank, IMF, OECD) and actively pursued academic activities. He has published 41 books and over 200 articles on financial, fiscal and social policy issues.

This year’s Popovich Award was presented to Zsolt Kuti, the MNB’s Executive Director for Monetary Policy, Financial Analysis and Statistics. Zsolt Kuti started his professional career at the MNB in 2008. Since 2014, he has been charged with the preparation of monetary policy strategy decisions, initially as Director, and, from 2021, as Executive Director.

The presentations and panel discussions at the 2023 Lámfalussy Conference explored the new dimensions of central banking in the post-covid era. In his opening speech, Mihály Patai, Deputy Governor of the Magyar Nemzeti Bank, underlined that inflation is the number one challenge faced by central banks around the world, and particularly in the CEE region. In this changed international financial and economic context, monetary and fiscal decision makers need to work together in order to take unprecedented measures.

In his speech, this year’s Lámfalussy Award-winner, Robert Holzmann, Governor of Austria’s central bank, praised the extraordinary and rich work of Alexandre Lámfalussy, which is of greater value and significance in the current turbulent economic climate than we might think. Quoting the famous words of Lámfalussy, the Governor stressed that ‘monetary policy remains an art, not a science’. In his lecture, Robert Holzmann outlined the origins of the current inflationary environment and highlighted the related pressing economic challenges.

As the keynote speaker of the conference, Catherine L. Mann, member of the Monetary Policy Committee of the Bank of England noted that the combined effect of shocks is transforming the current economic downturn into a different recession from those seen in earlier decades. In her view, with spiking inflation due to rapid increases in energy, food and commodity prices, central banks should maintain higher inflation expectations, as underestimating inflation dynamics comes at a significant economic cost.

A central theme of the conference was growing interest in central bank digital currencies, and it was noted that digitalisation had become a global megatrend, and that digital money can only become successful if an increasing number of people use it, and this requires a complex project management approach from central banks. Speakers agreed that the successes of CBDCs in recent years are promising, with digital money leading to more efficiency, financial inclusion and innovation. Two aspects emerged among panellists: the significance of (retail) CBDC research, on the one hand, and the use of digital money in cross-border payments, on the other.

The second session of the conference focused on promoting the green economy. Sean Kidney, CEO of the Climate Bonds Initiative, highlighted that the world was facing inevitable and massive changes. In the midst of adapting to these changes, we need to understand how to render our economies successful and resilient. A series of crises in recent years has shown that all events can be traced back to the disruption of our natural environment. Therefore, the popularity of green bonds is a great indication that there is demand for change and that change has already started.

The launch of the conference series was prompted by the 2008 global financial and economic crisis, which shook economics to its foundations and shed new light on issues that were believed to have been settled. In an era of paradigm shifts, it is crucial that national and international economic decision makers at the highest levels should exchange views on the emerging economic world order. The high degree of economic and financial integration calls for discussion, the coordination of measures and the strengthening of contact networks between European and non-European decision makers and economic opinion leaders.