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Hungary's Fidesz to overhaul financial supervision

Published 04/01/2010, 05:35 AM
Updated 04/01/2010, 05:52 AM

BUDAPEST, April 1 (Reuters) - Hungary's main opposition party Fidesz promised it would overhaul financial supervision if it wins an election this month as expected, but declined to comment on the role of the central bank after the reform.

Fidesz has sharply criticized the National Bank of Hungary for not cutting interest rates as fast as the party would have liked, as Hungary sought to steer its economy back towards sustainable growth.

Last month, business weekly Figyelo said Fidesz could consider the idea of merging financial markets watchdog PSZAF or shifting part of its responsibilities into the central bank. [ID:nLDE62HOQJ]

The weekly also said, giving no source for the information, that the party wanted to oust Governor Andras Simor.

Asked at a news conference whether Fidesz would attempt to modify the central bank law and merge financial supervision into the bank, thereby trying to remove Simor, party spokesman Peter Szijjarto declined to answer, but said:

"Yes, we want to change the system of the supervision of banks and financial institutions because the way it works is... inefficient."

He also added later:

"I am not sure that organisational changes will be independent from personnel changes."

Szijjarto, who is cabinet chief to Fidesz leader Viktor Orban, said former PSZAF chairman Karoly Szasz had been put in charge of drafting changes to the present system and that the plans would be ready by the end of April.

Orban said in an earlier speech that Fidesz would "renew" the central bank and the financial supervision PSZAF if it forms Hungary's next government after elections.

Simor was appointed to a six-year term in 2007 by former Socialist Prime Minister Ferenc Gyurcsany and has seen Hungary through fiscal and currency crises caused by public overspending and 2008's global financial turmoil.

Fidesz is widely expected to win the elections on April 11 and 25 by a big margin.

"I have to tell you there will be changes -- the next question, of course, is how," Szijjarto said.

(Reporting by Krisztina Than; editing by Patrick Graham)

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