March 2026 Issue of Financial and Economic Review Published

The studies published in the March issue of our scientific journal examine Bulgaria's accession to the euro area, the text analysis methods revolutionising economic research, the reports reflecting banks’ transition to a green economy, and capital adequacy rules. The essays present the work of the 2025 Nobel Memorial Prize Laureates in Economic Sciences, the impact of global challenges on public budgets, and the EU regulations concerning the sustainability tasks of banks.

The study by Charles Enoch and Anne-Marie Gulde shows how the strict limits on central bank financing and money creation, within the framework of Bulgaria’s currency board arrangement, coupled with the political consensus that emerged during the crisis, restored credibility, helped attract investment, and supported deep structural reforms and privatisation. The introduction of the euro brings benefits, including participation in ECB decision-making, lower currency and country risk, deeper access to financial market, and reduced transaction costs. At the same time, the remaining costs are largely temporary. However, accession will not solve country’s institutional and demographic problems.

The study by Csanád Temesvári, Beáta Horváth and Lívia Réka Ónozó demonstrates that diverse economic texts can provide a comprehensive, alternative, continuously updated source of information about the state of the economy. The authors employ BERT models to construct an economic sentiment index from online news and to classify retail trade items into tariff categories based on cash register information. According to their results, the news-based sentiment index can predict periods of economic crisis, and the newly applied methods allowed for more accurate classification of retail trade item names.

Regina Bodó and Edit Lippai-Makra examine the transformations in the sustainability reports of banks operating in Hungary that are required to disclose sustainability information for the first year of the application of CSRD: their content analysis compares the 2023 and 2024 reports of seven banks. According to their results, the disclosures have simultaneously evolved and become more standardised: the proportion of charts and numerical data has decreased, while the structured, descriptive narrative has increased in strength. In addition to the research findings, the authors formulate proposals to support central bank practice, information provision and legal interpretation, while raising pertinent regulatory issues.

The study by László Seregdi and Nikolett Bóta Kovácsné summarises the historical emergence and evolution of the capital adequacy requirements for credit institutions and investment firms, presenting the similarities and differences between them in detail. Utilising Hungarian and EU data, the study analyses the suitability of the current capital requirements framework for investment firms in measuring and limiting actual risks. The capital adequacy rules currently applied by investment firms are still relatively new; therefore, the study also suggests ways to further develop them.

Was growth driven by spinning machines, fuelled by steam engines and cooled by PC fans? Balázs Égert’s essay examines the fundamentals of economic growth through the lens of Nobel Laureates’ research. The author illustrates how, according to Mokyr’s theory, the revolution of knowledge and institutions became the engine of growth, and how Aghion and Howitt’s theory of creative destruction complemented this by highlighting the slowdown in innovation and productivity. Today, human capital, international trade, financial development, and pro-competition reforms are stagnating. The coordinated development of human capital and competition reform will be crucial in stabilising the growth trajectory.

In their essay, Gábor P. Kiss, Katalin Szőke and Dóra Novák examine the shifting role of the state amidst emerging new global challenges. The simultaneous processes that increase budget expenditures and reduce revenues include population aging, climate change, the digital revolution, the rising importance of security policy, increasing income and wealth inequality, the rising burden of public debt, and the impact of globalisation on tax revenues. The solution must simultaneously address fiscal balance and effective adaptation. To this end, the authors recommend focusing on low-cost yet effective measures and regulatory interventions.

Current EU regulations incentivise banks to monitor the greenhouse gas emissions of their debtors seeking to promote the carbon-neutral transition of clients through the intermediary role of credit institutions. In his essay, Gábor Szigel argues that this responsibility should lie with environmental authorities rather than banks. The author notes that the entire approach is predicated on metrics, which lack a sound methodological basis, and suggests that during the green transition, the role of banks should align with their core competencies where they are the most effective: the financing of projects that lead towards a carbon-neutral economy.

In addition to the above, the March issue of the Financial and Economic Review includes one book review and two conference reports.

The publication can be viewed on the website of our Journal:

The Financial and Economic Review

We wish you a very pleasant reading.

The Editorial Staff of the Financial and Economic Review/Magyar Nemzeti Bank