[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/mnb/finrev/v14y2015i1p139-165.html
   My bibliography  Save this article

The most important steps of BUBOR reforms led by the Central Bank of Hungary in an international comparison

Author

Listed:
  • Szilárd Erhart
  • Róbert Mátrai

    (Magyar Nemzeti Bank)

Abstract
What do interbank reference rates show and why do they play a prominent role? Why was the reform of BUBOR (Budapest Interbank Offered Rate) necessary and what were the reform steps taken by the central bank of Hungary (Magyar Nemzeti Bank – MNB) ? In this study, we seek answers to these and similar questions, while also providing an overview of international reform measures. The aim of the reforms initiated by the central bank was to eliminate the main risks arising in connection to the use of LIBOR (London Interbank Offered Rate) methodology in the domestic environment. Reference rates are considered public goods and economic sectors have financial contracts of considerable value indexed to BUBOR; numerous legal regulations also refer to BUBOR. One of the most important reform measure was to establish the Quotation Committee within the Hungarian Forex Association (MFT), in order to strengthen the independence of the administrator. The members of the Quotation Committee include the central bank of Hungary and the delegated parties of the Hungarian Banking Association (HBA). Important changes were made in the methodology of BUBOR in compliance with international practice: (i) the so-called trimming procedure was adjusted to improve the availability and reliability of price quotations;(ii) the number of listed tenors were reduced; and (iii) the methodology of selecting BUBOR market makers was confirmed. In order to make BUBOR quotations more transparent, the central bank of Hungary publishes quotations for each panel bank through the REUTERS press agency and regularly prepares and publishes statistical reviews on whether quotations comply with market conditions. In addition to this, the minutes of the Quotation Committee meetings are public since the first session in July 2014.

Suggested Citation

  • Szilárd Erhart & Róbert Mátrai, 2015. "The most important steps of BUBOR reforms led by the Central Bank of Hungary in an international comparison," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 14(1), pages 139-165.
    • Handle: RePEc:mnb:finrev:v:14:y:2015:i:1:p:139-165
    as

    Download full text from publisher

    File URL: http://english.hitelintezetiszemle.hu/letoltes/6-erhart-matrai-en.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dániel Horváth & Eszter Makay, 2015. "Analysis methodology of interbank reference rates - International trends and the results of the first Hungarian annual statistical analysis for 2014," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 14(2), pages 62-88.
    2. Dániel Béres, 2019. "Integrity of Financial Benchmarks," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(1), pages 33-59.
    3. repec:cbh:journl:v:14:y:2015:i:2:p:62-88 is not listed on IDEAS

    More about this item

    Keywords

    BUBOR; reference rate; LIBOR; monetary policy;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mnb:finrev:v:14:y:2015:i:1:p:139-165. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Morvay Endre (email available below). General contact details of provider: https://edirc.repec.org/data/mnbgvhu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.