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Simor defends management of central bank under his watch

National Bank of Hungary (MNB) governor Andras Simor defended the management of the central bank under his watch at a meeting of Parliament's Audit and Budget Committee on Monday.

In a review of the bank's 2010 profit and loss statement and balance sheet, Simor said the MNB had made HUF 13 billion in cost savings between 2006, when he became governor, and 2010, about the same amount as its operating costs in 2010. He noted that while the firmer forint generates losses for the central bank, it has a positive fiscal effect.

MNB supervisory board chairman Zsigmond Jarai, who is also Simor's predecessor, attributed the bank's HUF 41.5 billion loss in 2010 to poor management. The supervisory board ran into obstacles several times when reviewing the bank's balance sheet, he said, suggesting that the Central Bank Act be amended to expand the board's power.

Jarai repeated criticism that the salaries of MNB managers well exceed those in the state sector as well as in the commercial banking sector.