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Gov't to submit bill increasing PSzÁF powers over banks

The government plans to submit a bill to parliament by February 12 pursuant to its commitment to the International Monetary Fund giving increased powers to financial-market regulator PSzÁF over the operations of banks, the daily Népszabadság reported.

The paper said the proposal would give PSzÁF the right under certain conditions to restrict management and shareholders' rights at financial institutions.

The regulation is aimed at giving PSzÁF the power to intervene in the operation of major banks deemed important to the sector's stability, but only as a final resort and under certain conditions.

PSzÁF must first use other means at the organization's disposal such as calling on financial institutions to settle their capital position or put an end to a objectionable activities, delegating a commissioner to the company to investigate. If these measures do not yield the desired result and the insolvency of the financial institution in question would threaten the stability of Hungary's financial system, PSzÁF would have the power to order the institution to sell its assets and transfer its obligations, the newspaper said. (MTI – Econews)