Hungarian central bank may face police investigation

The National Bank of Hungary (NBH) may face a police investigation into allegations it revealed data "considered business secrets" to the International Monetary Fund (IMF), after Hungary's State Audit Office (SAO) said today it had notified "competent authorities" of its recent controversial audit findings.

The SAO, which alleged it had found unlawful behaviour at the central bank following a recent audit, said it "did not press charges" against the NBH as it is "not an investigative authority" and "not authorised to investigate".

But the SAO confirmed today it had passed on information to authorities that can launch such an investigation, with media reports stating the Hungarian police had launched an investigation into the central bank's activities.

A National Bank of Hungary spokesperson told CentralBanking.com, however, that the central bank had "not received any information from the authorities" about any new investigation, including one by the police. The Hungarian police did not respond to requests for comment before this article was published.

According to legislation brought in by the current government in 2011, the SAO "may initiate proceedings with the competent authority against the audited entities and the persons responsible" for anything it finds that it presumes unlawful.

The most serious of a number of allegations made by the SAO was that the NBH transmitted data "considered as business secrets" to the IMF, concerning "credits drawn by the Hungarian state from international organisations". The SAO says the data was transmitted "in an identifiable manner about seven Hungarian commercial banks from November 2008 to August 2010."

The current head of the SAO, László Domokos, was appointed by prime minister Viktor Orbán in 2010.

Orbán's appointees to the central bank monetary policy committee have consistently voted against the governor, András Simor, and his deputy governors in recent months – and one expert, who spoke to CentralBanking.com on condition of anonymity, says the SAO investigation into the central bank was a result of a "political vendetta" between Orbán and Simor.

Simor's term as governor expires next month, at which point he is widely expected to be replaced by an Orbán loyalist.