Hungary's former central bank governor Matolcsy has been arrested in connection with a fraud investigation at the central bank during his leadership. He and several other people were detained on Wednesday morning, according to the Hungarian news site Telex.
Matolcsy is accused of fraud that caused significant financial losses and of using a forged private document. His defence attorney, Pal Batki, said the former governor was due to be questioned later on Wednesday.
FROM ORBÁN'S MINISTER TO CENTRAL BANK CHIEF
Matolcsy was central bank chief from 2013 to 2025, having earlier been a minister in Orbán's government. He served as Orbán's economy minister from 2010 to 2013 before moving to the central bank.
Former finance minister Mihaly Varga has since taken over as governor, pledging an independent policy course amid a strong rebound in inflation and growing threats to economic growth.
MAGYAR GOVERNMENT PURSUES FORMER LEADERS
Orbán lost the election to Magyar in the spring of 2026 after 16 years in power. Magyar has promised to hold former powerful figures accountable for corruption and mismanagement.
Magyar's administration launched the National Asset Recovery and Protection Office in July, giving it investigative and prosecutorial powers to pursue cases of alleged misuse of public money. Hungary's parliament had already adopted a resolution on 26 May 2026 to set up an inquiry committee into alleged abuses at the central bank.
OTHER CASES LINKED TO THE CENTRAL BANK
In September Matolcsy was questioned as a suspect in a separate case over alleged abuse of office involving pressure on Erste Bank Hungary, part of Austria's Erste Group.
The new leadership of the Magyar Nemzeti Bank (MNB) has also filed a criminal complaint on suspicion of breach of fiduciary duty, negligent management, fraud and abuse of office. The complaint relates to the loss of value of five properties owned by the central bank, which announced it in a statement.
The central bank's Pallas Athéné foundations, established by the MNB under Matolcsy in 2014 and merged in 2019, are also part of the backdrop. Their asset manager, Optima Investment, managed almost 500 billion forints (more than €1 billion) in public funds.
ECONOMIC BACKDROP TO THE MATOLCSY ERA
The IMF said the pandemic, Russia's war in Ukraine and crisis-related policy stimulus widened Hungary's fiscal and current account deficits and triggered double-digit inflation in 2022. It said the MNB responded with a monetary policy stance that was among the tightest in Europe, and that a large current account deficit in 2022 turned into a surplus.
The IMF noted that the fiscal deficit and public debt-to-GDP ratios remain well above 2019 levels and that sovereign spreads exceed those of most peers. It added that various windfall taxes created investor uncertainty, while regulatory and subsidised lending measures, some since phased out, have distorted market rates.
A significant state presence in key sectors impedes competition and holds back productivity, the IMF said. Output declined by 0.9 percent in 2023, driven by a contraction in corporate investment and delays in public investment projects. The fund also pointed to ongoing negotiations on the "super milestones" that delay the disbursement of EU funds, and to concerns about policies that could undermine central bank autonomy.