UniCredit Bank Hungary Zrt.
Fri, 22/03/2024
BSE, CBH, and KELER celebrate jubilees
The period from 2023 to 2024 has been a special time in terms of commemorations in the Hungarian capital market as three of the most important institutions are celebrating their jubilees. They all have impressive histories and have been instrumental in the creation of a modern and well-functioning capital market in Hungary, amongst the first in the CEE region.
- The Budapest Stock Exchange (BSE) celebrated its 160th birthday this January and is the oldest of the three jubilees. The Hungarian Stock Exchange, the forerunner of today's BSE, began operations in 1864. By the turn of the century, 310 securities were traded on the exchange, and by the start of the First World War, the number had risen to almost 500. It operated for 80 years as one of the leading stock exchanges in Europe, but after the nationalization of most of the privately owned Hungarian companies in 1948, the government officially dissolved the exchange, and its’ assets became state property. Following the change of regime, BSE reopened its’ doors in 1990 after 67 years, with 41 founding members and a single share capital. The re-establishment of the market economy during the same period played a decisive role in the activities of the exchange, and the BSE was instrumental in the privatization of many leading Hungarian companies. In 2002, the exchange was transformed into a joint stock company, and on 21 June 2023, the 33rd anniversary of the institution's re-establishment, the BSE shares were listed in the Standard category of the regulated market of the Exchange.
- The history of the Central Bank of Hungary (CBH) began 100 years ago when, on June 25, 1924, the institution of an independent central bank was established and the CBH started its operations as a joint-stock company. The CBH took over the management of public accounts and debt, as well as the management of foreign exchange. Through its interest rate and credit policies, it controlled the country's credit environment and had a profound impact on the functioning of the banking system. After the Second World War, stabilization was achieved with the CBH's help, and the Hungarian Forint was introduced as a new currency in 1946. Following nationalization in 1947, the central bank and its management were placed under the authority of the government for more than four decades, but the two-tier banking system was restored in Hungary and the independence of the central bank was reinstated in 1990. The CBH has all the functions and powers of a central bank and is responsible for Hungary's monetary policy.
- The establishment of the Central Clearing House and Securities Depository (KELER) 30 years ago was also an important milestone in the development of the domestic capital market, as it made the settlement and clearing of securities in Hungary safe, transparent, predictable, and cost-effective. The creation of the new national infrastructure has created a stable environment that has strengthened the confidence of domestic and international investors in the Hungarian capital market. Over the years, starting from almost nothing in 1993, KELER has evolved from a chequered paper record holder to a securities depository with a robust IT backbone. Whereas, in the past, the main challenge was the movement and safe storage of physical securities, today the main challenge is stable, but continuous development of the IT infrastructure that serves market participants.
Happy anniversary!