Central Bank Independence in Transition Economies

5D. Banking Supervision and Exchange Rate Policy 

The NBG conducts the exchange rate policy (Art. 47) and determines the 

exchange rate (Art. 36) according to the guidelines accepted by the Parliament (Art. 

69). 

The Bank is responsible for commercial banking supervision (Art. 59). 

 

 

 

 

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Central Bank Independence… 

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6. Hungary

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The National Bank of Hungary (NBH) was founded in 1924 and re-established in 

1987. The act "On the National Bank of Hungary" was passed by Parliament in 

October 1991.  

6A. Governing Bodies and Financial Management 

The highest policy making body of the NBH with respect to the monetary policy 

is the Central Banking Council. The Council consists of the President, Vice-Presidents 

and other members (Art. 57 of the act). The President is appointed for six years and 

dismissed by the President of the Republic on the recommendation of the Prime 

Minister (Art. 58-2). The recommended person is questioned by the relevant 

Parliamentary Committee at a hearing (Art. 58-3). The President of the NBH can be 

dismissed in case of crime, “unworthiness” or incapability to perform the tasks 

associated with the office for other reasons beyond his control or attributable to him, 

(Art. 58-7). The procedures for appointment and dismissal of the Vice-Presidents and 

other members of the Council are the same but their term of office is three years (Art. 

57-3-c, 59, 60). Under current amendments to the Bank charter (taking effect on 

January 1, 1997) NBH President makes proposals for the post of  five Vice-Presidents. 

The Prime Minister, if he accepts the proposals, submit the names to the President of 

the Republic who appoints Vice-Presidents for 6 years term. The same procedures 

applies to other members of the Council, appointed for three years term.  

The Board of Directors, which assists the President in his duties, consists of the 

President, Vice-Presidents and other members elected by the General Assembly of 

shareholders on the recommendation of the President of the NBH (Art. 61). Members 

of the Board and the Council “may not hold office in any political party or appear in 

public on behalf, or in favour, of a political party” (Art. 69).  

The salaries of the President, Vice-Presidents, members of the Central Banking 

Council and the Board of Directors are determined by the General Assembly of the 

shareholders (Art. 56). The budget of the Bank is discussed by the Board of Directors 

and approved by the President of the NBH (Art. VII-3 and VII-2 of the NBH Statutes). 

The annual income statement is determined by the General Assembly (Art. 56).