Established on 24th June, 1924 Hungarian National Bank is the first independent central bank of the country. The major functions of this bank are keeping the state's account, monitoring the banking system of Hungary, controlling the foreign exchange policy, issuing national currency, managing the credit flow of Hungary, determining economic policy of the country etc.
Hungarian National Bank started functioning in Hungary on 24th June, 1924. It was the first independent central bank of Hungary. In the beginning it used to operate as a Joint Stock Company. Before the foundation of this bank the Austrian National Bank was the main bank of the country. In 1878 the Austro-Hungarian Bank was established and started carrying out the functions. Then came the Hungarian Commercial Bank of Pest. But the major functions were carried out by the contemporary central bank that is the Royal Hungarian State Bank.
Functions of Hungarian National Bank:
Hungarian National Bank successfully resolved many of the economic crisis of Hungary. Beside issuing pengo, the new currency it also stabilizes the inflation of crown. Some of the major functions of the National Bank of Hungary are
- Keeping the account of the state
- Manipulating the banking system of Hungary as a whole
- Monitoring the foreign exchange
|
- Supervising the credit flow of Hungary
- Controlling the debts of the country
Importance of the Bank:
Other than being the central bank of Hungary, Hungarian National Bank has also gained the membership of Bank for International Settlements since 1930. Not only that it is also an active shareholder of this international institute. The country's economic policies have also been determined by this bank 1931 onwards after Hungary got effected by the global economic recession. During this period the bank also became the sole authority to control the foreign exchange deposit.
Restructuring the Bank:
Pengo lost its value due to extreme inflation. As a result on 1st August, 1946 Hungarian National Bank issued the new currency forint. In 1947 the banking structure was completely reconstituted. The country adopted a single-tyre banking system means the debarkation between commercial bank and savings bank were erased and the National Bank of Hungary also started handling commercial activities. Though in 1987 Hungary returned to its old banking system.
Since the Hungarian National Bank is the central bank of the country the activities of this bank are supervised by government. In October 1991 the Act of the National Bank of Hungary was passed. However it underwent many changes and the responsibilities of this bank were redefined several times.
|
