Hungarian National Bank

For a short period during the Hungarian Revolution of 1848, the revolutionary government used the recently established Hungarian Commercial Bank of Pest as a central bank.[4]

In the negotiation of the Austro-Hungarian Compromise of 1867, the matter of the dual monarchy's central bank and its governance was set aside with the understanding that it would be reformed in the future. Meanwhile, in 1873 the Hungarian General Credit Bank received a mandate from the recently created finance ministry for a range of transactions, which made it effectively the main banker of the Hungarian government;[5]^: 156 that role was reinforced and extend by successive acts in 1886, 1901, and 1915.[5]^: 158

The adaptation of the pre-existing Austrian National Bank's to the monarchy's new political structure was only finalized in 1878, when its name was changed to Austro-Hungarian Bank. The latter was given a unitary governance with a general meeting (German: Generalversammlung) and governing council (German: Generalrat) chaired by a Governor, but a dual operating structure with two separate executive teams (German: Direktionen) and head offices (German: Hauptanstalten) in Vienna and Budapest.[6] The governor was to be jointly nominated by the respective ministers of finance of Austria and Hungary, and the bank was statutorily committed to opening new branches on an equitable basis in both parts of the Habsburg Monarchy. Hungarian nationalists were not satisfied by these arrangements and kept advocating for a separate Hungarian central bank, but their efforts remained unsuccessful until the end of the joint monarchy.[7]^: 216

The new Budapest head office building of the Austro-Hungarian Bank was inaugurated in 1905. It was designed by architect Ignác Alpár, with sculpture by József Róna and Károly Senyei.[8]

After the chaotic period immediately following World War I, the Hungarian authorities established a Royal Hungarian State Note-Issuing Institute (Hungarian: Magyar Királyi Állami Jegyintézet) on 11 July 1921, which issued Hungarian koronas to replace the Austro-Hungarian krone as the newly independent country's currency.[4] The Institute, however, was under the direct control of the government and found itself unable to control hyperinflation.

The Hungarian National Bank was established under the conditions of the stabilization loan coordinated by the Economic and Financial Organization of the League of Nations in 1923-1924, based on the successful precedent of Austria a year earlier.[9] In 1927, the National Bank introduced the Hungarian pengő to replace the korona.

In 1930, the Hungarian National Bank was a founding shareholder of the Bank for International Settlements. During World War II and in its immediate aftermath, the MNB was unable to maintain the value of the pengő which experienced the world's worst-ever recorded bout of hyperinflation in 1945-1946. The MNB introduced a new currency, the Hungarian forint, on 1 August 1946. The MNB was nationalized at the end of 1947.[4]

Following the Communist takeover and formation of the Hungarian People's Republic in 1949, the former operations of Hungarian banks were consolidated into a so-called single-tier banking system with four main financial institutions, namely the Hungarian National Bank, the Hungarian National Savings Bank Company, the Hungarian Investment Bank (renamed the State Bank for Development in 1972 and liquidated in 1987),[10]^: 386 and the Hungarian Foreign Trade Bank.[10]^: 382 Under that system, the MNB had no independence from the Hungarian state and also engaged in commercial banking activities. A "two-tier" system that focused the MNB on a monetary policy role was eventually re-introduced on 1 January 1987.[4]

200 Forint coin depicting the bank headquarters, 1992

The October 1991 Act on the National Bank of Hungary reinstated central bank independence. The Act LVIII of 2001 on the Magyar Nemzeti Bank established the Hungarian government and the MNB as the policy makers determining the exchange-rate regime. Since 26 February 2008, the forint has floated freely against the euro.[4]

Hungary was supposed to join the eurozone in 2010, which would have resulted in the MNB losing control of monetary policy, but central bank leaders criticized this plan, saying that the fiscal austerity requirements would slow growth.[11] In December 2011 two of the three major credit rating agencies downgraded Hungarian long term currency debt to "junk status", due in part to changes to the Constitution of Hungary, creating doubts about the independence of the central bank.[12][13] On 20 May 2016, Fitch Ratings upgraded Hungary's corresponding debt status to BBB- (which is investment grade), assigning a stable outlook to the rating. The upgrade was mainly motivated by, among other factors, high current account surpluses, high European Union (EU) fund inflows, banks' external deleveraging, the central bank's self-financing programme and foreign currency mortgage conversion reducing Hungary's external debt and financial vulnerability.[14]