EN 
ECB -PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 26 July 2013  
on the new integrated Hungarian supervisory framework  
(CON/2013/ 56) 
 
Introduction and legal basis  
On 7 June  2013, the European Central Bank (ECB) received a request from the Hungarian Ministry of 
Nationa l Economy (hereinafter the ‘consulting authority’) for an opinion on the draft law replacing  the 
Law on the Magyar Nemzeti Bank1 (hereinafter the ‘draft law’) . 
On 28 June 2013 , the consulting authority informed the ECB about a further substantial amendment  to the 
draft law (hereinafter referred to as  the ‘amendment to the draft law’), submitted  during  the Parliamentary 
procedure  and of a n amendment of the Hungarian Constitution t o expand  the Magyar Nemzeti Bank’s 
(MNB) role as defined in the Constitution to  provide for the new institutional framework of financial 
supervision t hat will be created by the draft law.  
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third and sixth indent s of Article 2(1) of Council Decision 
98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions2, as the draft law concerns rules applicable to the MNB , and  
contains rules applicable to financial institutions insofar as they materially influence the stability of 
financial institutions and markets . In accordance with the first sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, the  Governing Council has adopted this opinion.  
 
1.  Purpose of the draft law  
1.1 The draft law change s the MNB ’s competence and institutional framework by establishing  a legal 
framework for integrated supervision of the Hungarian  financial market . Currently , the Hungarian 
Financial  Supervisory Authority (HFSA) supervises credit institutions , capital markets, insurance 
markets and financial funds . 
1.2 Pursuant to the explanatory memorandum  attached to the  draft law (hereinafter referred to as the 
‘explanatory memoran dum’) , the new provisions are  expected to strengthen the macro -prudential  
                                                           
1  Law CCVIII of 2011.  
2  OJ L 189, 3.7.1998, p.  42. 
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2 framework in Hungary, to promote the coordination of macro - and micro -prudential policies, and to 
significantly contribute to ensuring financial stability.  
1.3 Pursuant to the draft law,  the HFSA  will be dissolved and its functions and responsibilities will be 
transferred to the MNB  on 1 October 2013 . In the future, t he MNB’s  responsibilities will also 
include financial market supervision. In addition, the draft law  provides that  the MNB will 
furthermore  be entrusted with consumer protection  and conduct ing the alternative dispute 
resolution procedure  currently operated by the HFSA for disputes between consumers and financial 
service providers  or entities participating in the financial mark et. 
1.4 The amendment to the draft law mak es the MNB the general legal successor to all of the HFSA’s 
rights and obligations.  
1.5 The draft law n ames the  MNB as the entity responsible for macro -prudential  policy  and micro -
prudential  supervision . Pursuant to the dr aft law, the new macro -prudential  instruments available to 
the MNB will be : (a) prevent ing and mitigating  excessive credit growth by defining rules 
applicable to the l oan-to-value and the payment -to-income ratios (for loan contracts with private 
individual s), as well as to the risk weights for residential and  commercial real estate lending ; (b) 
regulat ing the countercyclical capital buffer;  (c) prevent ing and mitigat ing systemic risks by 
defining rules applicable to the limit  of maturity mismatches between assets and liabilities, limit ing 
FX mismatches between assets and liabilities,  and short term liquidity requirements;  and (d) setting 
up a systemic risk buffer to reduce the probability of default by systemically important financial 
institutions . 
1.6 After 1 O ctober 2013, the MNB will be exclusively authorised to take administrative decisions 
pertaining to the prudential supervision of the financial markets.  
1.7 The draft law also states that the MNB will be the resolution authority in Hungary, once the 
applicable domestic resolution regime is adopted. As noted in the explanatory memorandum, t he 
Hungarian resolution framework is still under d evelopment , and the government wants to ensure 
that the framework provides for adequate  separation between the MNB’s superviso ry duties and its 
anticipated resolution functio ns. 
1.8 As acknowledged by the consulting authority and the MNB, significant organisational restructuring 
will be required to transfer  these new functions to the MNB. While the Monetary Council remains 
the MNB’s main decision -making body , responsible not only for strategic decisions in regard to  the 
tasks relating to  its membership in the European System of Central Banks (ESCB), but also for 
supervisory and macro -prudential  functions , the draft law provides for se parate operational 
decision -making by establishing a new body  of the MNB , the Financial Stability Council  (FSC) . 
This body  will be responsible for macro -prudential implementing the Monetary Council’s strategic 
decisions related to the MNB’s supervisory and  macro -prudential  tasks , as well as for taking the 
operational decisions related to these tasks . The Executive Board will remain the decision -making 
body responsible for the direction of the MNB’s operations.  
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3 1.9 Hungary intends to comply with the Recommendati on of the  European Systemic Risk Board of 22 
December 2011 on the macro -prudential mandate of national authorities (ESRB /2011/3 )3 by 
adoptin g the draft law, although the actual implementation date will take place well after the 
reporting deadline of 30 Jun e 2013 prescribed  by the E uropean Systemic Risk Board (ESRB) . 
 
2.  General observations  
In the context  of Article 127(5) of the Treaty , the ECB has welcomed on several occasions 
institutional frameworks established in Member States that recognise the essen tial role of central 
banks in promoting the safety and soundness of financial institutions and the stability of the 
financial system as a whole.  Against this background, the ECB welcomes the integration of the 
HFSA in to the MNB, as this integrated institut ional framework will improv e the MNB’s  ability to 
safeguard financial stability  and prevent  or mitigat e systemic risks. In Member State s with a 
relatively small financial market, such as Hungary , there are strong arguments for concentrating 
supervisory and macro -prudential  responsibilities within  a single authority4. 
The ECB considers entrusting the MNB  with supervisory tasks as compatible with its ESCB tasks. 
Moreover, given the Hungarian banking sector ’s structural connection  to that of the euro area, the  
ECB encourages  the Hungarian national legislator to follow developments in European Union 
legislation closely as regards the planned  Banking Union.  
However, the ECB notes that the assumption of new tasks by a national central bank (NCB)  in the 
ESCB  should  generally not i nfringe upon the NCB ’s independent execution of tasks within the 
ESCB framework  and the MNB’s existing tasks5. Accordingly, the MNB’s performance  of macro -
prudential  tasks  should not affect: (a)  the MNB’s functional and financial independen ce; or (b)  the 
MNB’s  performance of its ESCB -related tasks under the Treaty and the Statute of the E uropean 
System of Central Banks and of the European Central Bank (hereinafter referred to as the ‘Statute 
of the ESCB’)6. This should be given due considera tion when  formulating the provisions applicable 
to the HFSA’s integration into the MNB . 
The ECB also notes that Article 4(12) of the draft law does not specify that the MNB’s new tasks 
fall under its exclusive competence. This is inconsistent with the prov isions of Articles 4( 8) and (9), 
which, in the ECB’s view, are drafted to confer exclusive tasks on the MNB . 
 
                                                           
3  OJ C 41, 14.2.2012, p. 1.  
4  See also paragraph 4  of O pinion CON/2005/39. All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu.  
5  Opinion CON/2003/19.  
6  See paragraph  2.3 of Opinion CON/2013/30.  
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4 3. Specific observations  
3.1 Trans fer of new responsibilities to the MNB and the MNB’s  new governance structure  
3.1.1 Frequent c hanges to the lega l framework of the MNB ; incompatibility with the Treaties  
The Law on the MNB has been subject to frequent changes  over recent years. The currently 
applicable Law on the MNB took effect on 1 January 2012, and it has already been amended on 
several  occasions . Moreover, t he draft law will be the second recast  of the Law  on the MNB since 
2010 . The frequency of amendments to the Law  on the MNB , which the ECB has critici sed already 
in its previous Opinions7 and in its Convergence Reports8, creates instability in  the MNB’s 
operation s. A legal framework that provides a stable basis for the central bank’s functioning  is 
essential for central bank independence . 
The Hungarian legislator  has decided  to address the latest changes to the MNB’s legal framework 
in respect o f its new tasks by preparing a new law governing its legal status . Therefore  a number of 
outstanding issues that have been raised in  previous ECB opinions9 and Convergence Reports  
should  be addressed as a part of the current legislative process . The Law on  the MNB should be  
compatible with the Treaties and strengthen  the MNB’s institutional framework . 
In particular, the views expressed in paragraphs 3.2,  3.3 and 4  of Opinion CON/2012/49 continue to 
apply as regards additional checks and balances in the proc edure for appoint ing Monetary Council 
members,  the rules on dismissal of Monetary Council members, including the Governor and the 
Deputy Governors , and the text of the oath taken by the MNB’s Governor and the Deputy 
Governors.  
In addition , the ECB ’s Conver gence Report of May 201210 recommended  introduc ing additional 
safeguards to the Law on the MNB11 (Article s 35(1) and 36 of the draft law ) in relation to the  
monetary financing prohibition  and the requirements for the MNB’s legal integration into the  
Eurosyst em. 
Legal integration of the NCBs into the Eurosystem requires that national legislation be adapted to 
allow for the performance of Eurosystem -related tasks and compliance with the ECB’s decisions , 
once the Member State concerned has adopted the euro. The ECB’s 2012 Convergence Report 
identifies  several  Hungarian legislative  provisions  that are incompatible  with Treaty  requirements,  
in particular provisions included in the Law on the MNB relating to  the economic policy objectives, 
monetary policy, collectio n of statistics, official foreign reserves management, payment systems, 
issue of banknotes, appointment of auditors, financial reporting, exchange rate policy, international 
cooperation  and the recognition of the ECB’s power to impose sanction s. The ECB dr aws the 
Hungarian authorities’ attention to the fact that, for compl iance  with Article 131 of the Treaty , 
                                                           
7  See, for example, Opinions CON/2007/14, CON2008/83, CON/2010/91, CON/2011/104, CON/2012/43.  
8  See Chapter 6.6 of the ECB’s  Convergence Report  2010, and Chapter 6.5 of the ECB’s  Convergence Report  2012.  
9  See Opinions CON/2011/104, CON/2011/106, CON/2012/43, and CON/2012/49.  
10  See pages  243 to 248.  
11  See Article 12(4) of the Law on the MNB,which has changed in the draft law without taking into account the ECB’s 
Convergence Report 2012.  
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5 which  requir es that Hungarian legislation be compatible with the Treaty  and the Statute of the 
ESCB12, relevant Hungarian legislation had to be adjuste d by the date of Hungarian  accession to the  
Union. Hence,  adjustments necessary to ensure full integration of  the MNB  into the Eurosystem 
should also be adopted as soon as possible, while they must enter into force on the date Hungary 
adopts the euro.  
3.1.2 Central bank i ndependence and the monetary financing prohibition  
The provisions under which an NCB becomes the legal successor to any liabilities of a specific 
supervisory authority may raise issues in regard to  financial independence and compliance with  the 
prohibition of monetary financing laid down in Article 123(1) of the Treaty13, read in conjunction 
with Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the 
application of the prohibitions referred to in Articles 104 an d 104b (1) of the Treaty14. 
The principle of central bank independence requires Member States to ensure that NCBs have 
sufficient financial resources to perform ESCB or Eurosystem -related tasks as well as their own 
national tasks15. The tasks transferred to the MNB should not affect its ability to carry out its 
ESCB -related tasks from an operational and financial point of view. In this respect, the new MNB 
functions should be performed in a manner that is fully compatible with the MNB’s institutional 
and fina ncial independence and consequently should not impede the proper performance of its 
ESCB -related tasks.  
3.1.3  Devolution of the HFSA ’s assets to the MNB  
The draft law provides for the transfer of assets managed by the HFSA to the MNB on 1 October 
201316. Th e ECB notes that the se assets include  all proper ty, such as  shares in business 
undertakings and account  balances , but it does  not includ e real property of the HFSA which is 
owned by the Hungarian S tate, for which the MNB will only acquire property manageme nt rights.  
The balance of the HFSA’s account s will be transferred to the MNB  for use  at the MNB’s  sole 
discretion.  
3.1.4 General succession of the HFSA’s and Financial Conciliation Board’s obligations  and pending 
legal proceedings  
The amendment to the draf t law provides that the MNB will become a general legal successor of all 
HFSA obligations, including, inter alia,  its contractual relationships, pending procurement 
procedures, out -of-court redress procedures, tax -related administrative procedures as well as any 
other type of legal procedure. The amendment to the draft law provides further details that all rights 
and liabilities of the HFSA resulting from pending administrative legal procedures will devolve to 
                                                           
12  See paragraph 2.3 of Opinion CON/2013/30.  
13  See paragraph 3.2.3  of Opinion CON/2010/33.  
14  OJ L 332, 31.12.1993, p. 1.  
15  See the ECB’ Convergence Reports and paragraph 3 . of Opinion CON/2011/69  and paragraph 2.3 of Opinion 
CON/2012/52.  
16  See Articles 174 and 177 of the draft law.  
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6 the MNB17. As a consequence, any payment obligat ion from a legal relationship or a requirement to 
pay compensation in regard to any judgment handed down by Hungarian courts granting 
compensation to an individual or entity challenging the HFSA’s prior decisions will be borne by the 
MNB, without subsequen t recourse to the Hungarian State for reimbursement. This raises issues of 
financial independence and compliance with the prohibition on monetary financing laid down in 
Article 123 of the Treaty18. In order for the MNB to be able to perform its new supervis ory tasks 
without adversely affectin g its performance of o ther existing tasks, sufficient resources should be 
made available to it , and the HFSA liabilities, including those related to any HFSA ’s supervisory 
activities undertaken prior to the effective dat e of the transfer of responsibilities to the MNB should 
not be transferred to the MNB . In addition,  the MNB should  not have to bear any financial costs or 
liabilities related to any HFSA activities undertaken prior to the effective date of transfer of 
responsibilities to the MNB19. 
The ECB would expect  the assignment of the HFSA’s tasks and powers to the MNB to be 
accompanied by measures that fully insulate the MNB from all financial obligations resulting from 
any HSFA activities and contractual relationship s in the period prior to  the transfer of tasks. Th is 
should  include, for example,  the cost of legal representation in  any pending or future legal 
proceedings  in relation to the HFSA , as well as all  financial obligations arising o ut of  other legal  
relations hips, including employment relations between  any new MNB staff member and the 
HFSA20. It should also include any costs related to the operation s of the HFSA’s Financial 
Conciliation Board21. 
In order to comply with the monetary financing prohibition, the MNB  must be insulated from all 
financial obligations resulting from the HFSA’s prior activities  or legal relationships . Failure  to 
amend the draft law along the se lines would make  the proposed arrangements in the draft law and 
the amendment  to the draft law incompatible with Articles 123 and 130 of the Treaty.  
3.1.5 Financial c ontributions of supervised entities  
The amount of supervisory fees is defined in the respective law applicable to the supervised 
entities. The procedural rules and methodology for paymen t  of financial contributi ons to the  
HFSA’s supervisory tasks are  currently  defined in decrees adopted by the President of the HFSA. 
Up until now , financial supervision in Hungary has been fully funded by market participants and 
this financing system is to be maintained after the reform, insofar as the draft law provides for 
financing the supervisory tasks transferred to the MNB by contributions from supervised entities  
                                                           
17  See Article 175 of the draft law.  
18  See also paragraph 15 of Opinion CON/2004/31, paragraph 8 of Opinion CON/2005/39, paragraph 3.2.3 of Opinion 
CON/2011/46  and paragraph 4.2(d) of Opinion CON/2008/16 . 
19 See, for example , paragraph 3.2 of Opinion CON /2010/33, paragraphs 3.1 to 3.4 of Opinion CON/2011/5, paragraph 
2.2.5 of Opinion CON/2010/7.  
20  See, for example, paragraph 3.2 of Opinion CON /2010/33, paragraphs 3.1 to 3.4 of Opinion CON/2011/5, paragraph 
2.2.5 of Opinion CON/2010/7.  
21 The HFSA Financial Conciliation Board is an independent body without legal personalit y. The HFSA provides funding 
for its operation.  
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7 and funds  transferred from the HFSA22. The ECB understands that the concrete terms applic able for 
financing the HFSA’s supervisory tasks that are defined in decrees adopted by the HFSA’s 
President will continue to apply in order to finance the conduct of these tasks carried out by the 
MNB after 1 October 2013.  
In order to ensure the MNB’s financial independence , the performance of its new supervisory 
functions should be financed by contributions received from supervised entities . This  should cover 
all the  costs involved with the transfer and fulfilment of the MNB’s  new tasks . For this reason , in 
the future the MNB should  be involved in determining the amount of financial contribution payable 
by supervised entities , and furthermore, the methods for calculating  such contributions should be 
defined independently by the MNB , taking into account  its actual costs . 
Moreover, the MNB’s operational costs for its new supervisory tasks should be separately 
identified in its  accounting  books, and monitored by the MNB’s internal and external auditors.  
3.1.6 The MNB’s right to hire and retain qualified staff 
As pointed out in previous ECB opinions23, when allocating specific non -ESCB related tasks to an 
NCB, e.g. tasks related to  financial supervision or consumer protection, an adequate amount of 
human and financial resources must also be allocated for these tas ks, which should be  carried out in 
a manner which will not affect the NCB ’s operational capacity to perform its ESCB -related tasks24. 
The draft law expressly provides that , on the effective date , the HFSA will be dissolved, all 
employment relationships esta blished by the HFSA will cease to exist25, i.e. no employees of the 
HFSA will be automatically transferred to be employed by the MNB.  
The amendment  to the draft law however provides that all employees of the HFSA will become 
employees of the MNB on 1 Octobe r 2013. This provi sion breach es the MNB’s right to autonomy 
in staff matters , as it does not enable the central bank  to make an exclusive and independent 
decision on whether to employ any  former HFSA staff  members26. 
At the same time,  in order to provide fo r the smooth transfer of responsibilities and tasks from the 
HFSA to the MNB , the MNB should be allowed sufficient time from the entry into force of the 
draft law to recruit specialised staff of its own choice , where appropriate , for the proper 
implementat ion of its new responsibilities.  
In line with paragraph 3. 1.4 above, it should be ensured that , as regards staff recruited according to  
the principle of autonomy in staff matters, the MNB  will not  bear any financial obligations arising 
from employment rela tions that any new staff  recruited by the MNB  may have had with the HFSA  
in the past . 
                                                           
22  See paragraph 3.2.5 of Opinion CON/2010/33.  
23  See, for example paragraph 6.3 of Opinion CON/2006/15, paragraph 3.2.4 of Opini on CON/2010/33  and paragraph 3.5 
of Opinion CON/2011/5.  
24  See, for example, pa ragraph 3 of Opinion CON/2007/8 and paragraph 3.3 of Opinion CON/2011/76.  
25  Article 180 of the draft law.  
26 See paragraph 3.2.4  of Opinion CON/2010/33.  
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8 3.1.7 The FSC 
The draft law establishes a new body within the MNB  that will take decisions as regards macro -
prudential  policy , the supervision of the financial market as well as decisions related to the MNB’s 
new role as a resolution authority, within the strategic framework set by the Monetary Council . The 
Monetary Council  will be entrusted with new tasks  in this respect , i.e. to determine the strategic 
framework in relat ion to the MNB’s macro - and micro -prudential  tasks and in relation to the tasks 
as resolution  authority . The Executive Board will implement the decisions of the FSC through the  
Governor  and in particular through the Governor ’s decrees . 
The draft law provid es for the following composition of the Financial Stability Council:  the MNB’s 
Governor as chair,  the Deputy Governors supervising the fundamental tasks of the MNB related to 
macro -prudential  policy and financial supervision, and managers appointed by the Governor. A 
representative of the Minister for National  Econ omy may participate  in meetings and additional 
experts may also  attend  the meetings of the FSC upon invitation fr om the MNB Governor . The 
ECB welcomes  that the right of external participants to en gage in discussions27 does not confer 
voting rights to these participants. In addition, this  right  should not be used to constrain the 
independence of the FSC members . 
3.1.8 Legislation adopted by the HFSA President  
The Law on the HFSA currently gives the HFSA President the power to adopt secondary legislation 
to regulate matters falling within his competence. For reasons of legal certainty, this legislation 
should continue to apply after the transfer of supervisory tasks from the HFSA to the MNB . The 
ECB un derstands that there is no provision in the draft law that would  prevent  the MNB from  
repealing the decrees adopted by the HFSA President and replac ing them with decree s adopted 
independently by the MNB Governor in regard  to the MNB ’s new tasks.  
The ECB expects to be consulted on  any draft national legislation prepared by the MNB Governor 
that falls within the ECB’s competence, in accordance with the provisions of Council Decision 
98/41 5/EC.  
3.1.9 The MNB’s  cooperation with other bodies  
The draft law provide s28 that, as regards its supervisory tasks described under Article 4(9), the 
MNB will cooperate  with international organisations  to the extent detailed in bilateral agreements . 
The MNB  will provide international organisations with information , if Hungarian legislation 
allows  for the transfer of information to such organisations . Contrary to  a recent amendment29 to 
the Law on the HFSA, Article 139 of the draft law does not list the ECB and the ESCB amongst 
the organisations with which th e MNB cooperate s. Furth ermore, the draft law should  also be 
amended to reflect the legal obligation to cooperate with the ESCB and the ECB in the field of 
                                                           
27 Article 13(8) of the draft law.  
28  See Article 42(2) of the draft law.  
29  See the amendment to Articl e 11(1) of the Law on the HFSA incorporated in Law XCVIII of 2013 on the amendment of 
financial -related legal acts.  
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9 statistics. Such cooperation is provided for in  the first indent of Article 4 6.2 of the Statute of the 
ESCB. Although Regula tions adopted under Article 34.1 of the Statute of the ESCB in the field of 
statistics do not confer any rights or impose any obligations on Member States that have not 
adopted the euro, Article 5 of the Statute of the ESCB  (Collection of statistical infor mation)  applies 
to all Member States, whether or not they have adopted the euro. Furthermore , Article 4 of Council 
Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical 
information by the European Central Bank30, that imple ments Article 5.4 of the Statute  of the 
ESCB , requires all Member States to ‘ … organise themselves in the field of statistics and … fully 
cooperate with the ESCB in order to ensure the fulfilment of the obligations arising out of Article 5 
of the Statute’.  Accordingly,  Member States  whose currency is not the euro  are under an obligation 
to design and implement , at a national level , all measures they consider appropriate to collect the 
statistical information needed to fulfil the ECB’s statistical reporting requirements and to make 
timely preparations in the field of statistics in order for them to become participating Member 
States.  
3.1.10  Obligation to inform the Government about the adoption of decrees  
Performance by the MNB  of macro -prudential  tasks shou ld not affect: (a)  the MNB’s functional, 
institutional and financial independence; or (b)  the MNB ’s performance of its  ESCB tasks under 
the Treaty and the Statute of the ESCB.  
Article 169(4)  of the draft law requires the MNB’s Governor to inform the Govern ment with 
respect  to a decree31 that restrict s certain market activities, prior to adopting  that decree . The MNB 
should also give reasons for the adoption . The draft law does not provide  a reason  why MNB’s 
Gove rnor has to inform the Government in  advance , and this raises concerns as to  possible undue 
governmental  influence on the adoption  of such decree s. This would constitute a breach of the 
MNB’s independence  in performing its macro -prudential  tasks , which should be ensured in line  
with Article 1(2) of the  draft law . 
3.1.11  The proposed timeline for the MNB to assum e its new tasks  
Pursuant to the draft law, the MNB is to be fully functional as regards its new supervisory tasks on 
1 October 201332. Taking into consideration that the planned  adoption of the d raft law will take 
place in late September 2013, t he draft law does not provide for a sufficient period of time between 
the adoption of the draft law and the actual dissolution  of the HFSA , which is also  the 
commencement date for the  MNB  to perform its  new tasks33. 
As acknowledged by the consulting authority and the MNB , taking over supervision is a 
significantly complex task , requiring serious organisational restructuring on behalf of the MNB, 
particularly with regard to  the establishment of  applicable inte rnal regulations, the provi sion of the 
                                                           
30  OJ L 318, 27.11.1998, p. 8.  
31  See t he decree defined in Article 169(1) of the draft law.  
32  Article 172 of the draft law.  
33  See also pa ragraph 3.2.5 of Opinion CON/2011/46  and paragraph 3.2.6 of Opinion CON/2010/33.  
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10 human and financial resources necessary to carry out the new tasks, and the taking up of the 
practical activities in supervising the financial markets. However,  the time frame available between 
the adoption of the dra ft law and its entry into force  may not make it feasible for the MNB to 
prepare for its new tasks and ensure the continuity of efficient supervision of the entire financial 
market from 1 October 2013. Continuity of supervision is necessary to ensure financ ial stability 
and it is essential that there is no lack of supervision for any time period due to the reorganisation 
of the supervis ory structure. The ECB therefore suggests that the consulting authority sets a date  
after 1 October 2013 for the MNB  to assu me its new tasks.  
3.2 Performance of specific functions by MNB  
3.2.1 The macro -prudential  aspects of the MNB’s new tasks  
The ECB welcomes that the draft law  entrust s the MNB with fundamental tasks related to the 
exploration and management of systemic risks . The ECB supports the design of effective macro -
prudential  policy frameworks within Member States, in line with the guiding principles set out in 
Recommendation ESRB/2011/3.  Moreover, the ECB considers that the ECB and NCB s should 
play a leading role in macro-prudential  oversight, given their expertise and existing responsibilities 
in the area of financial stability34. 
Concerning the envisaged measures to reduce the probability of bankruptcy of systemically 
important institutions, Directive 2013/36/EU on ac cess to the activity of credit institutions and the 
prudential supervision of credit institutions and investment firms35 include s separate provisions o n 
capital charges for ‘global and other systemically important institutions ’36 as well a s for a ‘systemic 
risk buffer ’37. In order to improve clarity and ensure legal certainty , the ECB proposes that the 
provisions set out in Article 34 of the draft law are brought fully in line with the relevant provisions 
of Directive 2013/36/EU , clearly separating these two t ypes of instruments . 
Furthermore, the Hungarian legislator is recommended to  consider adding additional instruments in 
the draft law that are at the disposal of national macro -prudential  authorities pursuant to Directive 
2013/36/EU . 
 
The above observations  are without prejudice to the conclusions of the follow -up assessment of 
Recommendation ESRB/2011/3 , which the ESRB will prepare in accordance with Article 17 of 
Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24  November  
2010  on European Union macro -prudential  oversight of the financial system and establishing a 
European Systemic Risk Board38. 
                                                           
34  See paragraph 2.1 of Opinion CON/2013/30.  
35  OJ L 176, 27.6.2013, p. 338.  
36  See Article 131 of Directive 2013/36/EU.  
37  See Article 133 of Directive 2013/36/EU.  
38  OJ L 33 1, 15.12.2010, p. 1.  
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11 In this context, the ECB first notes that Article 4(7) of the draft law provides not only for new 
tasks , but also for a new objective f or the MNB to improv e the resilience of the financial 
intermediation system and to ensure its sustainable contribution to economic growth through its 
macro -prudential  policy. In line with Article  127(1) of the Treaty and Article  2 of the Statute of the 
ESCB , this objective should not prejudice  the primary objective of price stability  defined in Article 
3(1) of the draft law . The draft law should be adapted to reflect this.  
Moreover, in line with Article  127(1) of the Treaty and Article  2 of the Statute of th e ESCB, the 
MNB’s secondary objectives  should not prejudice  the ESCB’s primary and secondary objectives. 
This is required for full legal integration of the MNB into the Eurosystem, and therefore a 
legislative provision to this effect will need to enter int o force on the date on which Hungary adopts 
the euro .39 
3.2.2 The MNB ’s resolution authority  function  
The draft law provides that the MNB will be designated as the resolution authority .40 In this respect 
the ECB understands that the  detailed rules are to be defined in s eparate  legislation. Appropriate 
resources will have to be made available to ensure the MNB’s performance of this new task.  
As legislation detailing this new function of the MNB has not yet been prepared , the ECB is not in 
a position to assess  the MNB’s  ability to take on  the role of a resolution  authority. T o ensure legal 
certainty, national legislation providing for this new function of the MNB should be  adopted  in a 
timely manner . 
Further more , any performance  by the MNB of tasks as resolution  authority should not affect: (a)  
the MNB’s functional and financial independence; or (b)  the MNB ’s performance of its ESCB -
related tasks under the Treaty and the Statute of the ESCB.  
Moreover,  the ECB notes that draft national legislation pertaining to NCB tasks falls within the 
ECB’s competence and is therefore subject to the consultation requirement in accordance with the 
provisions of Council Decision 98/145/EC.  
3.2.3 The MNB’s new  consumer protection function  
As previously noted by the ECB41, consumer p rotection is not included in the tasks of NCBs 
specified in the Treaty and the Statute of the ESCB. However, as pointed out on previous 
occasions42, the ECB does not consider that this task would interfere with the ESCB’s objectives 
and tasks.  Pursuant to t he last sentence of Article 14.4 of the Statute of the ESCB, this task would 
have to be the MNB’s responsibility , for which it would be  liable . It would not be regarded as being 
part of the ESCB’s functions. The ECB understands that this task has been allo cated to the MNB43 
due to its overall supervisory responsibility for the entire financial market. The task  may 
                                                           
39  See ECB’s Convergence Report of May 2012, country summary, p. 57-58. 
40  Article 4(8) of the draft law.  
41  See, for example , paragraph 3.4 of Opinion CON/2011/46  and paragraph 2.4 of Opinion CON/2012/52.  
42  See, for example, Opinions  CON/2006/47, CON/2006/38, CON/2007/8 and CON/2007/29.  
43  See Articles 80 to 90 of the draft law.  
ECB -PUBLIC  
12 supplement MNB’s  supervisory powers and thus contribute to the soundness of the financial market 
and preserv e confidence in the market.  
The alloca tion of new powers to the MNB  aims to ensur e the transparency of financial services 
transactions and products offered by entities subject to its supervision . This allocation could 
improve the clarity and efficiency of the national regulatory framework whil e ensuring adequate 
consumer protection and a level playing field. Prudential supervision and investor/consumer 
protection are intended to safeguard the soundness of the financial market and preserve confidence 
in the marketplace.  
However, as previously st ated by the ECB in relation to other NCBs, it is important to ensure that 
prudential supervision and investor/consumer protection are adequate ly and equal ly emphasis ed 
and that appropriate resources are available to ensure their performance44. When granting  these 
additional powers to the MNB , care must  be taken to ensure that the MNB ’s operational capacity to 
carry out ESCB -related tasks will not be affected  from an operational a s well as  financial point of 
view, due to  any additional tasks introduced by the  draft law.  
3.2.4 The MNB’s responsibilities in the area of EMIR, SEPA and the supervision of negotiable vouchers  
The ECB has recently been consulted  by the Hungarian authorities45 as regards the amendment of 
the current Law on the MNB that needed to take p lace in order to implement  Regulation (EU) 
No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, 
central counterparties and trade repositories  (EMIR)46, as well as with Regulation (EU) 
No 260/2012 of the European Parli ament and of the Council of 14 March 2012 establishing 
technical and business requirements for credit transfers and direct debits in euro  (SEPA)47.  
This latest amendment of the Law on the MNB also introduced provisions a s regards the 
supervisi on of the activities and enterprises that issue and redeem negotiable vouchers not 
constituting legal tender . Consequently , the Hungarian legislators should consider including in the 
draft law also provisions on the MNB’s role as the competent authority for the above E MIR and 
SEPA provisions , including for  registering and supervising entities issuing such negotiable 
vouchers.  
3.2.5 Provisions of the draft law on banknotes and coins  
 Article 4(2)  and Articles 23 to 26 of the draft law establishing the MNB’s exclusive rig ht to issue 
banknotes and coins do not recognise the Council’s and the ECB’s powers in this field.  
In addition, the draft law should indicate whe ther the references to ‘banknotes and coins’, 
‘Hungarian and foreign means of payment’  and ‘legal tender in cir culation’ also cover euro 
banknotes and coins. In general, these references should mainly encompass Hungarian currency 
with legal tender status. If foreign means of payment are also meant to cover euro banknotes and 
                                                           
44  See Opinions CON/2006/47, CON/2006/38, CON/2007/8 and CON/2007/29.  
45  See Opinion CON/2013/40  
46  OJ L 201, 27.7.2012, p. 1, Articles 14(1), 15(1), 18, 20,  2021(1), 35, 41(1), 49(1), 54(1).  
47  OJ L 94, 30.3.2012, p. 22, Article 10.  
ECB -PUBLIC  
13 coins, the ECB suggests specifying in th e draft law that the relevant provisions of Union law apply 
and no national legislation can substitute for them. For legal certainty and consistency reasons, all 
of the above references should be defined.  
Article 23(9) of the draft law would benefit from a n amendment clarifying that applicant s seeking 
exchange of banknotes denominated in Hungarian currency, which are damaged due to the 
activation of security devices must  prove that they are the owner s or otherwise authorised 
applicant s acting in good faith , who have been  victim s of attempted or actual criminal activity 
leading to damage to these banknotes. This amendment would avoid the risk of allowing the actual 
criminal to request  the MNB to exchange such damaged banknotes by simply presenting an official  
document certifying the cause of the damage, as required under Article 23(9) of the draft law . 
To ensure a level playing field for means of payment denominated in all currencies, the phrase 
‘including means of payment denominated in euro’ should  be insert ed into Article  24(4) and (5) of 
the draft law after the words ‘foreign means of payment’. This insertion is necessary as it is 
understood that the reference to ‘foreign means of payment’ does not always include euro 
banknotes and coins in its scope48. 
Finally, the ECB recommends modifying Article  26(2) of the draft law to clarify that reproductions 
of euro banknotes and coins, including medals and tokens similar to euro coins, must comply with 
the relevant requirements of Union law , instead of referring to alterative reproduction r equirements 
laid down by the MNB ’s Governor.  
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 26 July 2013.  
 
[signed ] 
 
The President of the ECB  
Mario DRAGHI  
                                                           
48  See for instance Article 24(3) of the draft law.