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IMF experts suggest strengthening of market oversight

International Monetary Fund (IMF) experts see the need for Hungary's financial market oversight to be strengthened, either by expanding the scope of financial market regulator PSZÁF or by transferring regulatory activity to the National Bank of Hungary (MNB) and strengthening the regulatory arm of the bank, MTI learnt from IMF representatives in Hungary following a three-day visit by a delegation of experts to the country to provide technical support.

The IMF experts said a well functioning financial market regulator must be independent, transparent, efficient, prudent on a small as well as a large scale, and able to make fast decisions, especially in times of crisis.

If the role of PSZÁF is strengthened, the IMF experts said they envisioned a part for the regulator similar to that of the Competition Office (GVH), that is, a body that answers to Parliament, rather than the government, and that has the right to make legal statutes independently in the interest of efficient operation and as preventative measures.

If the MNB takes over financial market regulation, the banks' arm dealing with the stability of the country's system of financial institutions would have to be strengthened, expanded and developed to allow it to efficiently carry out better oversight than at present.

The experts did not take a stand on one possibility or the other, but said the steps necessary to improve regulatory activity in Hungary should be taken quickly.

The IMF delegation met with experts in the Finance Ministry, the Justice Ministry, the central bank and at PSZÁF. They also met with the central bank governor and the new head of PSZÁF.

The delegation made the visit on the initiative of the Hungarian government. (MTI-ECONEWS)