Further to our previous communication on 18 September 2013, after the Hungarian Parliament approved the modified Act on National Bank of Hungary the HFSA ceased to exist as of 1 October 2013 and all its financial supervisory functions were integrated into the NBH. According to the new regulation the NBH is responsible for the prudential supervision as well as the consumer protection of the financial system.
As a result of the integration the FSB has been established within the NBH, which has a minimum of three and a maximum of ten members and is headed by the NBH governor. The members of the FSB include: the NBH governor, the deputy governor for monetary policy, financial stability and lending incentives, the deputy governor for the supervision of financial institutions and consumer affairs, the deputy governor for statistics and financial infrastructures, and the managing director for financial stability and lending incentives. The FSB will act as a separate body responsible for the macro-prudential regulation and prudential supervision of the financial system.
In addition, the newly established Financial Arbitration Board and Financial Consumer Protection Centre will assist the NBH in its new supervisory role.
Impact on investors:
The macro- and micro-prudential supervision as well as the consumer protection functions within one institution ensure the stability of the financial system and the efficient use of financial resources. The new legislation aims at the oversight of the entire financial system as well as a possibility to control individual institutions on the market.
Related Newsflash: Newsflash Hungary - Update on Integration of Financial Market Supervision into the National Bank of Hungary