ECB worried about Hungarys central bank independence.

By bne IntelliNews December 16, 2011
The European Central Bank (ECB) said that the planned changes in the institutional framework of the Hungarian National Bank could affect the independence of the monetary institution, MTI news agency reported. The ECB emphasized the importance of having an independent central bank and pointed out the need to separate monetary policy from the influence of short-term political interests. Any intervention of the government in the decision-making process in the central bank should be avoided, the European monetary authority also noted. The bank said that there were substantial discrepancies between the draft of the central bank act, that was submitted to the ECB, and the measures announced earlier this week and required the up-to-date copy of the new draft as soon as possible. On December14 Hungary's government tabled for discussion in Parliament a new central bank act, which will again restructure the monetary council, increasing its members, but also restricting the rights of the governor to appoint them. Moreover, new lower ceilings for salaries will be introduced. It was namely the restriction of rights to appoint council members that faced strong opposition from the central bank and critique from international institutions like the ECB, when last year the government made the first changes in the structure of the National bank.

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