The head of Hungary’s investors insurance fund (BEVA), Péter Farkas (pictured), is leaving after the central bank insisted it compensate thousands of private bond holders after Quaestor’s bond issuing unit went belly up this year.
Farkas is to be replaced by András Fekete-Győr, the current head of Hungary’s national depositors insurance fund (OBA). Fekete-Győr will remain at the head of OBA.
At the end of March the central bank declared that BEVA must compensate those investors who purchased “fictive” Quaestor securities, and called on the national investors insurance fund to get started on the compensation process.
Several experts have argued that “fictive” securities, as such, do not exist because each one bears a number assigned to it by the government authority responsible for maintaining a central registry of securities. Others have called it unethical to require BEVA members to compensate the victims of non-BEVA members.
Previously Farkas warned against forcing BEVA to compensate “stowaways”, that is, investors who purchased securities in the full knowledge they were not insured. Why should the burden of compensating Quaestor’s victims fall on BEVA members when Questor’s bond selling unit was not a member of BEVA and contributed nothing to the compensation fund over the years?
Apparently, such arguments fell on deaf ears at the central bank, whose appointees reportedly control BEVA’s board of directors.
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