The Central Bank of Hungary reports fraud to the police related to the renovation of its headquarters policy

The Central Bank of Hungary announced that it had filed a report with the police regarding the renovation of its headquarters, as it suspected fraud, negligence and other violations that it said had caused financial damage to the institution.

Earlier this year, the Hungarian State Audit Office published a report on the bank’s real estate investments, which amounted to hundreds of millions of dollars during the term of former governor Gheorghe Matolczi, indicating that these investments lacked adequate controls and oversight.

The statement issued by the Central Bank stated that the current governor, Mihaly Varga – who was previously Minister of Finance, and took over the position to succeed Mattolczi last April – was the one who submitted the report based on the results of an independent investigation assigned to him by the board responsible for supervising the institution.

The statement explained that the report indicated that the bank incurred financial damages during the process of renovating its headquarters, which prompted the Board of Directors to follow all available legal paths to compensate for the losses.

The current bank president is facing pressure from the government to reduce the base interest rate, which stands at 6.5%, the highest among European Union countries.

For his part, the new governor pledged to reduce the bank’s non-core activities, which expanded significantly during the previous period, which was pursued by charges of corruption and fraud.

The Audit Bureau’s report had indicated that the budget for renovating the bank’s headquarters in the center of the capital, Budapest, had nearly doubled, while the number of employees that could be accommodated had fallen by half, and described the process as a waste of money.

For his part, the bank’s former president, Georgi Matolczi, sent a letter to the Audit Bureau, in which he said that the bank was operating within legal limits in all its activities.