Economy
Gov. Simor differs from government plan for Hungary's central bank
Simor sees the amendment submitted to the Central Bank Bill on Monday afternoon as "acceptable with minor modifications". The Economic Committe has made changes to several points of the original draft, citing compliance with the ECB's opinion.
As concerns the NBH's independence, the amendment stipulates that the staff of the National Bank of Hungary and its organization act independently in carrying out assigned duties and responsibilities; the government or any other organization shall respect this principle and shall not attempt to influence the staff of NBH or its organizations in their official duties.
Another addition to the draft is that the reporting obligations of the NBH Governor must not result in interference with the independence of the staff of NBH decision making bodies, must not influence the status of the Governor of the NBH as a member of the ECB General Council, and must not interfere with confidentiality as stipulated by the European System of Central Banks and the European Central Bank.
Also added to comply with ECB criticism, the National Bank of Hungary would be alloewd more time to set up a Board of Directors, until March 31 2012.
"There are two or three cardinal issues in which the current modifications do not take ECB comments into consideration," Simor said. "The ECB has said the procedure of appointing rate-setters to the Monetary Council and Vice Governors has been changed several times recently without paying attention to the needs of the NBH," he cited the ECB assessment, adding that in his view there was no need to amend the current system of appointments.
"similarly to the ECB, I find it difficult to understand why it is necessary to increase the number of rate-setters in the Monetary Council, or that of Vice Governors. There is not a single word on that in the draft," the Governor noted.
"The NBH is a functional organization where, during the five years in which I have been working there, there has been no need for a third Vice Governor. The two Vice Governors have performed all the duties; therefore if a third Vice Governor were now appointed, the other two could be working part time," Simor argued. "A Monetary Council of 5 to 7 members, as laid down in the current regulations, is perfectly fine to make decisions for a country of this size. Neither professional considerations nor economical operation warrant an expansion," he said, clearly taking a stance against appointing one more Vice Governor and expanding the Monetary Council.
The Committee supported the proposal, with 18 members approving and 5 abstaining from the vote.
Further modifying proposals will be on the agenda at Friday's Committee meeting.
As concerns the NBH's independence, the amendment stipulates that the staff of the National Bank of Hungary and its organization act independently in carrying out assigned duties and responsibilities; the government or any other organization shall respect this principle and shall not attempt to influence the staff of NBH or its organizations in their official duties.
Another addition to the draft is that the reporting obligations of the NBH Governor must not result in interference with the independence of the staff of NBH decision making bodies, must not influence the status of the Governor of the NBH as a member of the ECB General Council, and must not interfere with confidentiality as stipulated by the European System of Central Banks and the European Central Bank.
Also added to comply with ECB criticism, the National Bank of Hungary would be alloewd more time to set up a Board of Directors, until March 31 2012.
"There are two or three cardinal issues in which the current modifications do not take ECB comments into consideration," Simor said. "The ECB has said the procedure of appointing rate-setters to the Monetary Council and Vice Governors has been changed several times recently without paying attention to the needs of the NBH," he cited the ECB assessment, adding that in his view there was no need to amend the current system of appointments.
"similarly to the ECB, I find it difficult to understand why it is necessary to increase the number of rate-setters in the Monetary Council, or that of Vice Governors. There is not a single word on that in the draft," the Governor noted.
"The NBH is a functional organization where, during the five years in which I have been working there, there has been no need for a third Vice Governor. The two Vice Governors have performed all the duties; therefore if a third Vice Governor were now appointed, the other two could be working part time," Simor argued. "A Monetary Council of 5 to 7 members, as laid down in the current regulations, is perfectly fine to make decisions for a country of this size. Neither professional considerations nor economical operation warrant an expansion," he said, clearly taking a stance against appointing one more Vice Governor and expanding the Monetary Council.
The Committee supported the proposal, with 18 members approving and 5 abstaining from the vote.
Further modifying proposals will be on the agenda at Friday's Committee meeting.
