The FT is reporting that the European Central Bank has opened an investigation of the Hungarian central bank, which it suspects of financing government activities and duties. Such practices are prohibited under European Union regulations.
The National Bank of Hungary has launched several programs not related to monetary policy, some of which may qualify as activities regularly undertaken not by central banks but by governments, the ECB wrote in its 2014 Annual Report published Monday.
The FT says these include buying real estate, artwork and Hungarian cultural property, along with hiring staff that used to be employed by the Hungarian Financial Supervisory Authority to the central bank.
Hungary isn’t part of the eurozone, but as a member of the European Union, it is part of the European System of Central Banks, meaning that its central bank is overseen by the ECB.
