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MNB expects consolidation among investment service providers

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Photo by Jessica Fejos

National Bank of Hungary (MNB) deputy governor László Windisch expects the market of investment service providers to consolidate as a result of the higher standards being enforced and more stringent measures proposed by the MNB after severe shortcomings were found during investigations of the scandals at the Buda-Cash, Questor and Hungária brokerages earlier this year.

The MNB expects to wind up the majority of its investigations by the end of this year, and the process of establishing the personal responsibility of the senior managers of the three brokerages could also be closed by that time, Windisch, who is the MNB deputy governor responsible for financial market oversight, told Hungarian news agency MTI.

All investigations must be completed, and closed by employing stringent measures, if necessary, even if they are related to insignificant players on the market, Windisch said.

The deputy governor did not rule out that the licenses of some market players could be withdrawn as a result of the investigations, although he added that they had not found cases of fraud that would have involved the loss of a clientsʼ funds or securities.

The MNB will ensure that the market abide by the effective regulations, Windisch said.

The drop in confidence in the capital market sector proved to be only temporary, the deputy governor said, noting that both the stock of securities and the number of clients has grown compared to the beginning of the year. He attributed this to the fact that the problematic cases have been brought to light and also to the transparent communication provided by the MNB.

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