Government drafting changes to financial institution screening law

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The Hungarian government has already begun drafting changes to the regulations to shorten the time between comprehensive reviews of financial institutions from the current five years to three years. The move is motivated by the Buda-Cash affair, Hungary’s economy minister Mihály Varga told state-owned M1 television late Friday.

The government has set up a committee to assess damages to the state and local governments caused by the suspension of Buda-Cash brokerage’s activities. Varga added that the committee is expected to finish work and deliver a report soon.

The National Bank of Hungary on Tuesday said it had withdrawn the license of Buda-Cash and reported suspected criminal activity to the police. The MNB also put a limit on withdrawals at members of the DRB Bank group, which have ownership ties with Buda-Cash. The participants at the meeting considered how the central bank, in its role as market watchdog, could better prevent similar cases of fraud.

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