When MNB generates a loss, it is the state budget that needs to finance it.Continue reading
LMP wants the law on the central bank to be amended to ensure that any profits the bank generates are transferred to the state treasury, the party co-leader’s, Erzsébet Schmuck, said on Tuesday.
Schmuck told an online press briefing that the central bank governor’s recent revelation that the bank was likely to continue stacking up losses in the hundreds of billions of forints in the coming years was “shocking”.
In the past two years of the pandemic, the central bank transferred its profits to the state treasury, she noted. But this was not the case previously, she added, citing as an example data showing that the bank accumulated profits of more than 500 billion forints (EUR 1.4bn) in 2014.
The law governing the central bank mandates it keeps any profits while any losses must be paid out of the central budget, she said, even when the budget closed 2021 5,500 billion forints in the red.
Renewing its proposal submitted in 2016, LMP called for the central bank law to stipulate that the bank should transfer most of its profits to the treasury and to wind up the charitable foundations it established. The capital held by these foundations should also be transferred to the budget as this could be used to develop higher education, she said.
Featured photo by Tibor Illyés/MTI