László Domokos – Gyula Pulay – Mária Király-Szikszai

Monetary and Fiscal Policy: How Have the Two ‘Climbers’ Helped Each Other in the Past Decade and a Half ?

The independence of the Hungarian National Bank in setting monetary policy is guaranteed by law. However, the ultimate goal of monetary and fiscal policy, the promotion of sustainable growth of the national economy, is common. The creators of the two policies can be compared to climbers who climb to the same summit by different routes, bound together by a long safety rope. Such a rope is that when the central bank's reserves are exhausted, the budget is obliged to reimburse the central bank to cover its balance sheet deficit. This poses a direct budgetary risk. The supportive effect of monetary policy on fiscal policy can be seen, mainly indirectly, in the safer and cheaper financing of public debt. The opposite can be seen as an indirect budgetary risk. The paper reveals that between 2007 and 2012, the budgetary risks of monetary policy were amplified. However, from 2013 onwards, monetary measures have not created a direct budgetary risk, in fact the central bank paid dividends to the government. After 2013, monetary policy measures contributed to a significant reduction in the interest burden on public debt and an increase in the share of domestic sources in the financing of public debt. Monetary policy played an active role in mitigating the negative economic impact of the COVID pandemic. However, restoring fiscal balance, which was disrupted by the huge expenditure required to deal with the pandemic, is a different task for monetary and fiscal policy. It is important to keep monetary and fiscal policy together in this period.

Péter Fáykiss – Balázs István Horváth – Gábor Horváth – Norbert Kiss-Mihály – Ádám Nyikes – Anikó Szombati

Transformation of Money in the Digital Age

In the new digital age, the transformation of money is inevitable. Our study focuses on this challenge and the potential public policy response to it: the concept of central bank digital currency (CBDC). We briefly outline the historical development of money and the challenges posed by the current digital transformation for the financial system, especially in the area of monetary policy. In response to the Fintech and BigTech challenges and the potential 'digital' dollarisation of national currencies, the idea of a central bank digital currency is emerging as a growing and almost unanimous response among central banks. Implementation, however, involves a very complex set of decisions, fraught with design issues, challenges and risks. These decisions, in turn, need to be driven by general motives and the specific problems to be addressed. In the concluding part of our paper, we briefly look at where the introduction of central bank digital currency is most advanced in the world. Although we do not yet see the final full-scale introduction of CBDC in countries with significant economic weight, we have no doubt that the evolution of money will continue in this direction.

Anita Boros – Barbara Eszter Huszár

Green Financial Products in the European Banks' Portfolios – with a Hungarian Perspective

Recently, the financial sector has also become increasingly sustainability-oriented. National central banks and national credit institutions are trying to follow the ever-expanding international regulatory framework and to develop new financial instruments to implement ESG requirements. Our research looked at the green finance portfolios of the ten major European banks by the total assets in 2021 to assess the market for green financial products. We have also examined the green instruments of the ten major domestic banks by balance sheet total, with the hypothesis that the green product market for domestic banks can learn a number of lessons from the green product portfolios of the major European banks.

Viktória Deák

The MNB’ Green Programme

This paper establishes that central banks, supervisors and the financial system play a key role in mitigating climate change and other environmental anomalies. However, the situation in Hungary highlights the challenges faced by the financial system that make it difficult to assess, manage and measure financial risks related to climate change. In order to maintain the stability of the financial system and promote sustainable finance in Hungary, the Hungarian central bank launched its Green Programme. The paper examines the measures taken so far in this initiative and their results. Finally, it notes that since the start of the programme, the domestic green financing environment has likely improved, but additional tools will be required, in particular to increase the preparedness of the financial sector for financial risks related to climate change.

Ágnes Csiszárik-Kocsir – Mónika Garai-Fodor – Erika Varga

Changes in Financial Competence by Different Generations as the Aftermath of the Pandemic

Financial awareness and financial literacy is one of the key competences of our time. The accelerated digital world requires individuals to acquire a new set of skills and competences that are essential for success in everyday life. The acceleration of digitalisation has brought a new dimension to the concept of financial literacy and awareness. The emergence of new financial and banking products and services has created new challenges for individuals. A wide range of products and aggressive advertising campaigns are finding consumers, offering very favourable opportunities, generating countless market and financial bubbles. Digitalisation has received a further boost from the pandemic. In the face of this information dumping, we can only survive if we have a solid financial foundation and the proper financial socialisation. In this paper, we aim to explore deeper dimensions of the financial culture, competence, and awareness, based on the results of a primary research, pointing out changes and transforma tions in financial awareness.

Zsófia Kenesey – Róbert Tóth – Balázs Patyi – László Pataki

The Impact of the Tightening of Banking Regulatory Requirements on the Profitability and Concentration of the Banking Sector in the European Union

The stability of banking systems is a fundamental requirement for any national economy. Instability in the banking system and the consequent possible bank failures pose a threat to the functioning of the whole economy through a chain of infection. The crisis of 2008-2009 also highlighted the vulnerability of banking systems, creating the need for stricter capital and liquidity requirements for banks. Tightening the rules could also carry the risk of “over-regulation” in mega-markets, which might also worsen the profitability of financial institutions. The study examines the changes in the profitability of the banking system of the European Union and Hungary over the period between 2008 and 2019, as well as the impact of the tightening regulations on the ratio of non-performing loans.

Viktor Vágner

Impact of IFRS Adoption for Individual Reporting Purposes on the Profit of Hungarian listed Companies

The purpose of this article is to analyze the effects of the mandatory transition to IFRS (International Financial Reporting Standards) in Hungary at the beginning of 2017 (Act CLXXVIII of 2015) on the profits and financial performance of companies listed on the Budapest Stock Exchange. The research assumes a change in accounting regulations that will affect the measurement of results and valuation procedures that will have a significant impact on the financial condition of companies. The method of the analysis is the inverse of the comparability index - originally developed by Gray (1980), which allows the results to be compared between different accounting systems. The calculation of the indexes is based on financial data published in the individual annual reports of the various accounting systems mentioned above for listed companies transitioning to IFRS. The study uses mathematical-statistical calculations to compare the values of the indexes. In connection with the establishment of the study, it was found that there is a significant difference between the results and indicators of the examined companies according to the IFRS and the Hungarian Accounting Standards, of which higher average values can be observed in the case of IFRS.

Norbert Forman – Richárd Kása – Róbert Tóth

Resignation, Digitalization, and the Hospitality Industry within Hungary (Part 1)

As a result of the Coronavirus pandemic, our lives changed. It affects how we work, how we interact with others, and how we cope with stressful situations. We examine the relationship between digitalization and resignation in the Hungarian hospitality industry in this study. Reviewing the literature on the link between these variables forms the first part of the research. Part two will present actual data in support of the findings in part one. These two parts address the following research question: The impact of COVID-19 on the hospitality job market?; the impact of the resignation wave on businesses trying to restart?; can digitalisation be a solution to these limitations?