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Gov’t to boost powers of finance watchdog

The Hungarian government has approved legislation to make financial markets watchdog PSzÁF more independent and give it the power to issue regulations, PSzÁF chairman Ádám Farkas said.

The government plans to submit legislation to parliament today to transform PSzÁF from a quasi-government organ into an autonomous body in a bid to better enable it to prevent future shocks in the financial system.

Making the financial markets watchdog more independent has been one of the key recommendations of the IMF which, along with the European Union and the World Bank, lent Hungary $25 billion a year ago to stave off economic meltdown.

Most of the planned legislation requires a simple majority. But the crucial amendment, equipping PSzÁF with the power to issue regulations, requires a two-thirds majority in the legislature, where the government is in minority.

If adopted, the new regulation would enable PSzÁF to ban activities deemed harmful to customer interests and it would also significantly raise the maximum fine the watchdog can impose to HUF 2 billion ($11.3 million). (Reuters)