MNB wants to break up bank sector monopolies
Recently appointed National Bank of Hungary governor György Matolcsy wants to use the central bank's powers to break up monopolies and bring down the cost of financial operations in the country. “We want to use the central bank's tool chest to break up cemented monopoly positions and reduce financial operating costs in the country,” Matolcsy said in an interview published in weekly Heti Válasz on Thursday. “Understandably, not everybody will be happy about stronger competition,” he added. Matolcsy, whose unorthodox policies as economy minister irked many foreign investors, said the MNB would look to the example of other central banks when deciding which policy tools to use. “It's enough if we use instruments that have already been used by other central banks: an abundance of conventional and unconventional solutions are at our disposal,” he said.
Matolcsy said it was the central bank's “duty” to help achieve the government's economic policy goals, namely, economic growth, creating workplaces, improving competitiveness and making more credit available to SMEs. He said the central bank's “Funding for Growth Scheme,” which offers lenders HUF 500 billion of refinancing for SME credit, would be evaluated by rate-setters after it winds up at the end of August. “The continuation [of the scheme] will depend on the results,” he said, noting apparent “strong demand” already for the refinanced loans. He said a merger of the MNB and financial market regulator PSzÁF, as recently proposed by the central bank, would be a good preventative measure for the next crisis, noting the earlier “serious failure of economic, regulatory and monetary policy” to halt foreign currency leveraging in Hungary. Asked whether the MNB's international reserves could be tapped to solve the problem of the banking sector's high stock of foreign currency-denominated loans, Matolcsy answered with an unequivocal “No.”
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