БАНКОВСКАЯ ПОЛИТИКА ВЕНГРИИ

Abstract

The article discusses banking policy in a political system that can be described as “illiberal democracy” (a term coined by Fareed Zakaria), i. e., a constitutional democracy with an authoritarian leadership style. The economic basis of such regime can be described in terms of re-emerging financial nationalism. It leans on the main three pillars. 1) The nation’s monetary sovereignty is consolidated, its monetary policy is becoming more autonomous and guided by the immediate national interests – in contrast to the situation when the proscriptions of foreign and/or supranational institutions prevail and the national government loses control over the monetary policy; 2) distancing of the national government and the Central Bank from the policies of the international organizations that impose credit terms unprofitable for the country; 3) discrimination of foreign actors operating in the country and mobilization of domestic sources for financing the economic development. The authors analyze the case of Hungarian banking policy since 2010 in the context of the concept of financial nationalism. The activities of current Viktor Orban’s government are aimed at expanding interventionism in the operations of the local banking system. Higher taxes levied on nonresident banks made their local transactions unprofitable and resulted in re-establishment of the national control over this system (now more than 60 percent of total banking assets belong to Hungarian entities). There may be some benefit for the economic development in the short term. However, there may be major long-term negative effects of such policy. The fact that the Hungarian National Bank (Central Bank) became less independent in terms of its monetary policy means a significant change from the institutional point of view. The continuing authoritarian trend in the national political and economic governance bears the hazards of increased corruption, slower economic dynamics and decreased international competitiveness of Hungary.