Simor named new Hungary central bank governor

Andras Simor, a leading figure in the development of Budapest’s financial markets since their birth in the early 1990s, was named the next governor of Hungary’s central bank on Friday.

Mr Simor, head of Deloitte Hungary, a subsidiary of the global tax and consulting firm, and a former chairman of the Budapest Stock Exchange, will take the job in March when the term of Zsigmond Jarai, the current governor, expires.

Investors and analysts are expected to welcome the appointment because of Mr Simor’s reputation as a political independent and a skilled manager.

Some market players had worried that Ferenc Gyurcsany, the prime minister, would appoint a figure close to his Socialist party, thereby limiting criticism from the central bank as the government struggles to reduce a massive budget deficit.

The government launched an austerity package last year aimed at cutting the deficit from about 10 per cent of gross domestic product last year to 3.2 per cent in 2009.

By choosing Mr Simor, Mr Gyurcsany appears to have resisted the temptation to choose a partisan governor.

However, Mr Simor represents something of an unknown quantity when it comes to his views on monetary policy.

“I think it is a more positive than negative, though the market should be rather cautious because we don’t know much about his monetary policy ideas,” said Zoltan Torok, senior analyst for Raiffeisen Securities in Budapest.

Gyorgy Suranyi, a former central bank governor, called Mr Simor a “well trained commercial and investment banker, a really intelligent person”.

Mr Suranyi, who served with Mr Simor on a board that advised the government on its long-term budget reforms, dismissed the possibility that Mr Simor would favour loose monetary or fiscal policies.

“He is committed to macro-economic stability, including price stability, so I think his policy is going to be a reasonably tight one,” Mr Suranyi said.

In a brief public comment after his appointment, Mr Simor said: “I am proud of my appointment because the bank, through achieving price stability and supporting the operation of a secure financial institutional framework, plays a vital role in facilitating economic development.”

In addition to running Deloitte’s Hungarian operations since 2002, Mr Simor is on the firm’s regional board of directors.

Mr Simor worked in the central bank from 1976 to 1989, mostly in international operations. He founded the Budapest arm of Creditanstalt Securities in 1989 and guided some of Hungary’s largest state-owned companies onto the Budapest stock market in the 1990s.

In the late 1990s he oversaw the tie-up of the investment banking arms of Creditanstalt and Bank Austria, when the two banking groups merged.

In 2001 he was named one of the top 50 managers in Europe by American magazine Business Week.

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