From the 2026 budget audit
Why should bank commissions on government debt outpace inflation?
Fees paid to banks and dealers for placing government bonds are a real cost — but they should shrink as the debt stock contracts, not keep pace with prices.
Roughly 9,000 Ft per employed Hungarian per year — 42.5 milliárd Ft in bank and dealer commissions, frozen so real value falls about a quarter over a decade.
What you see — and what you don't
The seen: banks and primary dealers receiving commissions for placing and managing Hungarian government debt — a real service the state must pay for. The unseen: every taxpayer funding a fee bill that grows in nominal terms each year the state issues more debt, with no mechanism to shrink unless the allocation is explicitly held flat.
Objection
"But primary dealers and banks provide essential services — without them, Hungary cannot issue debt at all."
Answer
The proposal honours that: a nominal freeze, not a cut. Held at its current level, ordinary inflation erodes the real value by about a quarter over a decade. As the reform programme shrinks the deficit, the volume of debt to be placed falls and the commission bill follows it down — the freeze becomes progressively easier to hold.
Share if you think bank fees on government debt should fall with the debt stock — not keep pace with inflation.
The analyst's verdict
Commissions and Other Costs
Rationale
This is the first genuinely discretionary line in the chapter — the fees, commissions, underwriting spreads, and distribution costs paid to banks, primary dealers, and intermediaries for placing and managing Hungarian government debt. Unlike the interest lines, this is not a contractual coupon owed to a creditor; it is the operating cost of the issuance process, and operating costs are a legitimate subject of efficiency review. The honest classification is Nominal Freeze rather than Immediate Cut. A sovereign issuer genuinely incurs real costs placing debt — primary dealers, settlement infrastructure, rating agencies, paying agents — and the framework's test is whether the activity is a rights-protection or contractual function, not whether it could be wished to zero. It is a real and necessary operating cost of a function (debt management) that itself exists only because of past deficits. But the line should not grow in real terms. Held at its nominal level, ordinary inflation erodes roughly 20-25% of its real value over a decade — an implicit efficiency discipline that does not require renegotiating any contract. As the debt stock shrinks under fiscal consolidation, the volume of issuance to be intermediated falls, and the freeze becomes progressively easier to hold.
Transition mechanism
Hold the nominal allocation flat. Subject intermediary fees to competitive procurement and benchmark the dealer spreads against comparator sovereign issuers. The line falls naturally as issuance volume declines with the deficit.
Affected groups
Primary dealers and banks intermediating government debt; the Államadósság Kezelő Központ (Government Debt Management Agency, ÁKK) as the managing institution; taxpayers.
Free Society Institute
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