3.14 Introduction of the ESCB Committees

made already when the pandemic began to unfold in Hungary, i.e. in February and March 2020.

– During the emergency, the MNB – in the spirit of the measures taken by the Government of Hungary and on the basis of its instructions – took the necessary measures, and therefore it was able to perform its daily tasks properly, completely and on time and could protect its employees from the impacts of the pandemic.

– From March to June, the vast majority of MNB employees performed their tasks in home office (by virtue of the extraordinary creation of a general opportunity to work from home and the establishment of the conditions for it).

– The level of service remained unchanged in terms of basic tasks, with employees sometimes carrying out their tasks from home with an increased workload.

– The associated operational risks increased in some cases, justified by the need to manage the pandemic (prior to the pandemic, only allowing access to critical systems operating directly from the internal network in the context of home working, for which appropriate controls were developed).

– In several areas, the MNB put in place the conditions to properly manage another emergency. The most important task was to build IT background capacity for a large number of home workers. Means of disinfection, masks, gloves and body temperature gauges were purchased.

– In a special section on the intranet interface, the MNB continuously informed its employees about the measures that were introduced and taken, the standards of conduct to be applied during the pandemic and the health carerelated instructions.

– Transition: In June, the MNB carried out smooth transition and without any problems. During both the transition period and the second wave, the COvID work group continuously monitored the international and domestic evolution of the pandemic. Following the end of the first wave of infections, it returned to its original working schedule in line with the decision taken by the Hungarian

Government.

– Managing the second wave of the health emergency: Once challenges have been successfully addressed, it is appropriate to review the experience gained in real-life situations and to incorporate the established practices into instructions and procedures. As the second wave began to unfold, proposals were made to introduce further restrictions or to ease decisions were taken earlier, taking into account government measures and the international pandemic situation. Due to the significantly increased health risks, the MNB introduced new measures and rules, and took additional precautionary measures in order to protect employees.

During the pandemic, the MNB was in constant contact with the central banks of the European Union as a member of a working group set up for this situation in order to share emergency management experience. After the final end of the pandemic, the emergency period will be evaluated under the leadership of the COvID work group, and the necessary amendments to the action plans and regulations will be implemented.

The ESCB Committees play an important role in the work of the ECB’s decision-making bodies. The basic role of these committees is to prepare decisions and facilitate coordination as per the horizontal division of various central bank duties, covering all areas of central banking operations. The senior executives and relevant experts of the MNB play an active role in the work of these committees and in the activities of the committees’ working groups.

Since Hungary’s accession to the European Union, the MNB’s management and experts have been participating in the work of the ESCB committees and their working groups. This membership and cooperation provides an opportunity for national central banks to work together and formulate coordinated positions, and also enables the representatives of national central banks to obtain information on the ECB’s activities on a regular basis.

On 31 December 2020, fifteen ESCB committees and two other committees assisting the work of the ESCB were in operation. In connection with the launch of the Single Supervisory Mechanism (SSM) in November 2014, in addition to the two existing configurations (euro area composition and ESCB composition) a number of committees have held meetings in SSM composition since 2014 as well, with the attendance of representatives of the supervisory authorities operating as organisations independent of the central banks of the Member States participating in the SSM.

The following provides a brief summary of the fields of activity (mandates) of each ESCB committee:

Accounting and Monetary Income Committee (AMICO): This Committee develops and regularly reviews the accounting policy principles which define the framework of financial statements in accordance with the Statute of the ESCB and the methodology of the preparation of regular financial reports, facilitating their coordination at an international level. It monitors the calculation of monetary income in accordance with the risk management process developed by the security framework system of accounting.

Banknote Committee (BANCO): This Committee determines the euro banknote needs of euro area countries, coordinates the production of banknotes and works out the stockpiling and banknote processing policies of euro banknotes. Its tasks include sharing experience in the production of euro banknotes, the examination and development of security features to prevent euro banknotes from being counterfeited, and the assessment of security risks related to the production of the euro. It contributes to the harmonisation of practices applied in the euro area, the development of the system which monitors counterfeiting and the verification of statistics regarding euro banknotes and coins.

Committee on Controlling (COMCO): COMCO has been an ESCB committee since July 2007 (only euro area NCBs participate in the work of this committee). It contributes to the application and enhancement of the Common Eurosystem Cost Methodology and prepares analyses on the cost data and cost structure of certain functions and products of the Eurosystem/ESCB. In the area of management information systems, it serves as an important forum for cooperation and information exchange on issues concerning the ESCB as a whole.

Eurosystem/ESCB Communications Committee (ECCO): This Committee contributes to the development of the external communication policy of the Eurosystem, the ESCB and the ECB, with the aim of making the objectives defined by the Eurosystem/ESCB more transparent and understandable, and informing the public of the tasks and activities of the Eurosystem and the ESCB.

Financial Stability Committee (FSC): The FSC has been operational since 2011, when the Banking Supervision Committee (BSC) ceased to operate. Its task is to provide professional support to the decision-making bodies of the European Central Bank in their functions relating to financial stability and macroprudential policy issues.

Internal Auditors Committee (IAC): By reviewing the relevant common projects, systems and activities and by providing for cooperation in certain auditing issues which are of ‘common interest’ for the ECB and national central banks, this Committee assists the ESCB in achieving its targets.

International Relations Committee (IRC): The IRC assists in carrying out those tasks of the ESCB that are related to international cooperation and contributes to formulating the position of the Eurosystem regarding the various areas of relations with non-EU countries.

Information Technology Committee (ITC): This Committee contributes to the development of the information technology policy and strategy of the Eurosystem and the ESCB as well as the related guidelines with special regard to security concerns and provides technical advice to other committees. Furthermore, it initiates and implements Eurosystem and ESCB-level developments and independent projects.

Legal Committee (LEGCO): LEGCO provides legal assistance for the work of the ESCB; in particular, it contributes to the maintenance of the regulatory framework of the Eurosystem and the ESCB and to the review of the transposition of legal regulations into national law, and monitors and reports on how national authorities and EU institutions comply with their consultation obligations relating to draft legislation in areas falling within the ECB’s competence.

Market Infrastructure and Payments Committee (MIPC):

This Committee assists the ESCB in the smooth operation of payment systems and in connection with the cross-border use of collateral. Furthermore, it supports the ESCB in general and ‘oversight’ issues relating to payment systems, as well as in strategic decisions related to securities clearing and settlement systems. It pays special attention to the strengthening of the oversight activity, the fostering of panEuropean developments in the area of high- and small-value payments, securities and collateral management.

Market Operations Committee (MOC): The MOC assists the ESCB in the implementation of the single monetary policy and the execution of foreign exchange transactions, the management of the ECB’s foreign reserves and in the appropriate adaptation of the monetary policy tools applied by the central banks of Member States where the euro is yet to be introduced, as well as in the implementation of ERM II.

Monetary Policy Committee (MPC): This Committee assists the ESCB in the implementation of the single monetary and exchange rate policy of the Community. In addition, it provides assistance in the execution of the ESCB’s tasks related to the coordination of the monetary and exchange