A brief overview of the Magyar Nemzeti Bank
– it establishes the macroprudential policy for the stability of the entire system of financial intermediation, with the objective to enhance the resilience of the system of financial intermediation and to ensure its sustainable contribution to economic growth. To that end and within the limits specified in the MNB Act, the MNB explores the business and economic risks threatening the system of financial intermediation as a whole, promotes the prevention of the development of systemic risks and the reduction or elimination of evolving systemic risks; furthermore, in the event of disturbances to the credit market, it contributes to the balanced functioning of the system of intermediation in financing the economy by stimulating lending and – in the event of excessive credit outflow – by restraining lending. Above and beyond its basic tasks, the tasks of the MNB are the following:
comply with the basic tasks and responsibilities of the MNB as defined in the MNB Act. Pursuant to Act CXCIV of 2011 on the Economic Stability of Hungary, the Governor of the MNB is a member of the Fiscal Council (hereinafter: FC), and thus the information and professional expertise available in the MNB supports the work of the FC. The MNB prepares background analyses for the FC’s tasks stipulated in the Stability Act and makes such available to the FC.
2.2 BODIES AND MANAGEMENT OF THE MNB The MNB operates as a legal person functioning in the form of a single-member company limited by shares. The general rules pertaining to companies limited by shares and the relevant provisions of Act on the Civil Code are applicable to the MNB, with the exceptions laid down by the MNB Act.
– i t acts as a resolution authority; – it acts as the sole supervisor of the financial intermediary system, in order to a) ensure the smooth, transparent and efficient functioning of the system of financial intermediation; b) facilitate the prudent operation of the persons and organisations comprising the system of financial intermediation and supervise the prudent exercise of owners’ rights; c) discover undesirable business and economic risks to individual financial organisations or individual sectors thereof, reduce or eliminate specific or sectoral risks which have evolved, and take preventive measures to ensure the prudent operation of individual financial organisations; d) protect the interests of users of the services provided by financial organisations, and strengthen public confidence in the system of financial intermediation; – via the Financial Arbitration Board, it administers the out-of-court resolution of disputes related to the establishment and fulfilment of contracts for services, established between consumers and organisations of the financial intermediary system. Additional tasks of the MNB may be defined by acts and, in relation to the supervision of the system of financial intermediation, by legal regulations adopted pursuant to the authorisation of an act. Such tasks of the MNB shall
The Hungarian State as the shareholder is represented by the Minister of Finance. The MNB operates without a General Meeting. The shareholder is entitled to adopt decisions, by way of a shareholder’s resolution, on the establishment and in the amendment of the Statutes as well as on the appointment, dismissal and remuneration of the auditor. As a guarantee of independence, in contrast to the practice of other companies limited by shares, the remuneration of the MNB’s Governor, Deputy Governors and other members of the Monetary Council as well as the members of the Supervisory Board is determined by the MNB Act rather than by the shareholder. Likewise, the bodies of the MNB are specified by the MNB Act as follows: the Monetary Council, the Financial Stability Council, the Executive Board, and the Supervisory Board. The MNB’s supreme decision-making body is the Monetary Council. The scope of competence of the Monetary Council includes: – strategic decisions concerning monetary policy, the issue of legal tender, the holding and management of foreign exchange and gold reserves, strategic decisions relating to foreign exchange transactions in the context of foreign exchange reserve management and the implementation of exchange rate policy, as well as strategic decisions concerning statistical tasks, including in particular decisions on the level of the reserve ratio and the interest
ANNUAL REPORT • 2020
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