2021. September 30. 11:00

Focus on new effects on retail finances - The Latest 2021/3 Issue of the Public Finance Quarterly has been published

The focus of the new issue is on the new effects on the retail finances. We can get to know the households’ green and financial knowledge and attitudes, the possibilities of simplifying the Hungarian personal income tax system’s composition in the previous years, as well as the financial culture of economics students in the Hungarian higher education. In our readers can learn more about the relationship between corporate governance and creative accounting, also about the comparison between the margin calculation methodology of central counterparties and clearinghouses. In addition, we can observe the factors that lead to successful crowdfunding campaigns in Kenya, and also examine the contribution of ESG information to the financial stability of European banks. In our literature review we introduce the topic of deep integration.

FOCUS – New Effects on Retail Finances

Based on a retail questionnaire survey conducted in the framework of the BME-MNB cooperation András Bethlendi and András Póta aim to answer the following main research questions: 1) how the households’ environmental and financial knowledge and attitudes are related to the demand for green financial products, 2) how significant (price) support shall be used to channel Hungarian consumers towards more sustainable financial products. In addition, the authors aim to explore the households’ green and financial knowledge and attitudes. During the study, aggregate indices and indicators are created to study the main issues, which form the basis of the analysis. The Hungarian population generally has a positive attitude towards environmental protection. Respondents tend to underestimate their green knowledge and their financial knowledge prudence. Education and financial literacy are also the most important in terms of financial and green knowledge and attitudes. Concerning personal green attitude, the research find that the pragmatism provided by the financial possibilities is decisive in everyday life. Demand for financial products is most affected by pricing, green and financial knowledge indices, and age (demography). Based on the results, only a significant price subsidy could steer domestic consumers towards more sustainable financial products.

Éva Bonifert Szabóné examines the possibilities of simplifying the Hungarian personal income tax system’s composition in the previous years. Tax burden curves of the theoretical, simplified tax model established for this investigation are fitted to the curves of the real tax system, while the parameters of the theoretical model are determined by a computer program. Since the modern Hungarian income taxation had been introduced, the system has long been subject to a wide variety of changes concerning the basic elements examined in the study. The author gives an answer to the question whether it is necessary to maintain complex tax systems at all costs, possibly in favour of achieving the most equitable income tax system. The results of the investigation indicate that a simpler theoretical system could have replaced the previous years’ tax systems elements with multi-bracket and sometimes complicated tax credit, which applied more tax benefit elements compared to the theoretical system. On this basis, it may be an important aspect for the more distant future that in the course of developing personal income tax systems, the sophisticated equity of the systems should be observed through the mathematical spectacles of simplification options.

Botond Kálmán, Judit Bárczi and Zoltán Zéman examine the financial literacy of economics students in higher education. According to the relevant literature, financial knowledge is becoming more valuable, but this increasingly important knowledge is not accompanied by practical results. Therefore, the feeling of financial security is also diminished, especially when an unexpected major economic crisis develops. The authors examine the reasons for this decrease through a two-phase, offline questionnaire survey based on the responses of Hungarian and foreign students. The questions are used to assess students' theoretical knowledge, financial behaviour, and relationship to finance. They are also asked how they assess their own financial situation and sense of security. The most important result is that the year of the survey affects all dimensions of financial culture, which justifies the role and impact of the crisis caused by the epidemic. The authors conclude that while in 2019 greater financial literacy helped address livelihood problems, as a result of the Covid-19 epidemic, in 2020 it revealed for the respondent that he could not solve his situation sufficiently. The level of financial literacy had the same effect on the ability to manage finances.


Ervin Denich and Dániel Hajdu assert that the study of the relationship between corporate governance and creative accounting came to the fore after the accounting scandals (Enron, WorldCom, Satyam). The analysis points out that corporate governance is a topical issue that has an impact on creative accounting, if companies use creative accounting techniques, they may indicate weaknesses in the company. The authors examine the relationship between creative accounting and corporate governance using the Transparency and Disclosure Index (TDI). The study enables the transparency of the structure and operation of the company, as well as the measurement of the publication of various company information, on the basis of publicly available data. To measure the impact of the data, performance indicators are included in the analysis, as well as the relationship between corporate governance and accounting creativity is examined through correlation analysis. Based on the results obtained, a moderately strong, negative relationship can be observed between corporate governance and creative accounting.

Comparison between the margin calculation methodology of central counterparties and clearinghouses is the main topic of the analyses of Melinda Friesz and Kata Váradi. Clearinghouses and central counterparties have become the backbone of financial markets by stepping between trades, facilitating securities trading, and derivative transactions on exchanges and over-the-counter markets. This paper focuses on the margin calculation methodology of these institutions and emphasizes the contrast between the two. Results show that although capturing the same risks, clearinghouses’ margin requirement is better from a procyclicality and cash flow management point of view; however, central counterparties margining is more prudent based on our results.

The study of Esther Wanjiru Wachira and Virginia Kirigo Wachira is aimed at investigating the factors that lead to successful crowdfunding campaigns in Kenya. With very minimal research on crowdfunding funding in Kenya, the study therefore, is aimed at analyzing reward-based crowdfunding in Kenya using Kickstarter data, and identifying the crucial factors necessary to run a successful campaign. The study using the Pearson correlations analysis found a very strong and positive statistical correlation between updates, amount pledged, backers, and successful projects, moderate but positive statistical correlation between comments, new backers, returning backers, and successful projects. However, there was a negative but insignificant correlation between the goal, funding period, and successful projects. The novelty will be of great benefit to project funders who want to run successful projects in Kenya. The results of this study will guide potential founders on the do’s and don’ts of running a successful campaign. Finally, the study recommends further research on the success factors of other crowdfunding models in Kenya as the study solely focused on the reward-based model.

Balázs Tóth, Edit Lippai-Makra, Dániel Szládek and Gábor Dávid Kis examine the contribution of ESG information to the financial stability of European banks. Nowadays more and more economic actors publish information regarding sustainability, through economic (E), social (S), and governance (G) performance. In the case of banks, ESG performance is important as they affect most of the industries through their investments and loans. In this research the authors’ aim is to investigate the relationship between financial stability and ESG performance. They apply panel regressive methods during the analysis. The sample consists of stock exchange listed lending institutions (243 banks) from the European Union (EU) and the European Free Trade Association (EFTA). Their results show that ESG performance reduced the ratio of non-performing loans significantly. Furthermore, the positive effect of regulatory capital has been confirmed. Consequently, the authors can assert that the economic, social, and governance performance have beneficial impacts on financial stability. Therefore, the consideration of these pieces of information should be important for the investors and the regulators as well.


Gábor Kutasi introduces the work of Péter Halmai titled ‘Deep Integration. Economics of the Economic and Monetary Union’ (in Hungarian: ’Mélyintegráció. A Gazdasági és Monetáris Unió ökonómiája’). The book presents in an unparalleled way the framework for the interpretation, examination, and content of economic and monetary integration, bringing fresh air to the somewhat outdated theses of the last 3-4 decades that have been repeatedly described, or empirically substantiated and refuted by many.

The studies published in this issue can be viewed and downloaded here