Hungary Moves to Shield Budget From Mounting Central Bank Losses
- Government seeks to extend compensation period to 5 years
- Central bank’s ballooning losses threaten planned deficit cuts
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Hungary’s government seeks to change rules that would force it to quickly recapitalize the country’s central bank as it accumulates huge losses.
Draft legislation on the government’s website extends the period during which the government must compensate -- in cash -- for National Bank of Hungary losses to five years from the current period of eight days. If implemented, the law will spread out over time and potentially reduce billions of dollars in government obligations.