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Government would merge ctrl bank, market regulator in one

The government plans to merge the National Bank of Hungary (MNB) and financial market regulator PSZÁF into one organisation, the website origo.hu reported on Tuesday. The MNB's staff has already prepared the respective draft legislation, work on which was directed by Márton Nagy. Nagy, who was appointed executive director for financial stability and lending by new governor György Matolcsy, is tipped to be one of the future leaders of the new integrated institution, origo.hu said. When asked to confirm the information, the central bank's press department told the website that "international experience show that such mergers have made the regulation and control of the financial system more efficient". Legislation passed late 2011 established the framework for a possible merger of MNB and the PSZÁF in the future, but Parliament withdraw the possibility of such a merger in June 2012, after European authorities expressed doubts concerning the independence of the central bank, governed at that time by the predecessor of Matolcsy, Andras Simor, under whose leadership MNB's monetary policy was perceived by the government as being at odds with its economic policies. Allowing the possibility of a merger was one of the points of contention in infringement procedures launched against Hungary by the European Commission in 2012. Prime Minister Viktor Orbán said as early as January 2012, after a meeting with European Commission President Jose Manuel Barroso, that the possible merger between PSZÁF and the MNB was shelved.