Hungary fines Bloomberg for market manipulation

By bne IntelliNews May 3, 2013

bne -

Hungary has handed Bloomberg a HUF10m (€33,790) fine for an erroneous report on last month's rate decision by the central bank. The incident saw the forint hit hard, prompting the prime minister to renewed speculation of a market conspiracy against the country.

The misreported headline - filed six minutes ahead of the announcement from the Magyar Nemzeti Bank (MNB) of a 25 basis point cut, to leave rates at 4.75% - said that it had in fact trimmed the benchmark to 1%. The headline was corrected within 40 seconds, according to a statement from Hungary's financial regulator PSZAF on May 2. However, the forint weakened sharply, although temporarily, just before the publication of the rate decision.

The watchdog said the newswire's faulty reporting had influenced markets and that it had not used adequate controls to mitigate the damage, and hence it is guilty of market manipulation. "Although the news was published due to a technical error, the regulator believes that the news agency failed to apply control mechanisms to prevent false news being published," the statement said, according to Reuters.

PSZAF added that market manipulation is found when unfounded, misleading, and false information is published and "the person disseminating the information is aware of the fact that the information is false or misleading, or should have been aware of it had (the person) acted with the care that can be expected in the given situation".

"The authority regarded as a mitigating circumstance that the publication of the false news was due to an unexpected, automatic technical condition, which it was not possible to avert manually immediately," PSZAF added in its statement.

Prime Minister Viktor Orban and senior officials in the Fidesz government have often accused the markets in the past of conspiring against Hungary. For instance, in late 2011, the weakening of the forint and rising yields forced the PM into a reversal, as Budapest said it would seek an IMF bailout, even though Orban had kicked the international lender out the previous year.

Today, due to the high level of forex debt held by Hungarian households, the markets are seen as the one realistic brake on government policy, with Brussels and Washington routinely ignored. Gyorgy Matolcsy - formerly the main architect of policy as economy minister - blasted the "pirates" based in London's financial institutions weeks ahead of his appointment as head of the MNB.

Related Articles

UK demands for EU reform provoke fury in Visegrad

bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more

Erste claims Hungary is breaking peace deal with banks

bne IntelliNews - Hungary will breach its February agreement with Erste Group if it makes the planned reduction in the bank tax conditional on increased lending, the Austrian lender's CEO ... more

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss