Hungarian prosecutors detain former central bank governor Matolcsy in foundations probe

As of 6:09 p.m. ET, Wednesday, Oct. 21, 2026

Hungarian prosecutors on Wednesday questioned and detained György Matolcsy, the former governor of the Magyar Nemzeti Bank, the country's central bank, as a suspect in an investigation into economic fraud causing a particularly significant financial loss and other crimes, the Central Chief Prosecution Office of Investigation said.

The office said it also detained the representative of a private equity fund who acted in a disputed securities lending agreement and a lawyer who took part in the transaction, and that it moved for international arrest warrants for two more people. The suspects questioned so far, including Matolcsy, refused to testify, the prosecutors said.

What prosecutors allege

The case concerns one strand of what the prosecutors call the "MNB case." Under Matolcsy, the central bank set up the Pallas Athene Foundations in 2014 and gave them more than 266 billion forints of public money from its exchange-rate gains, with the assets managed by Optima Befektetési Zrt., the office said. The foundations merged in 2019 to form the PADME Foundation, according to the statement.

On Feb. 28, 2025, Matolcsy's second-to-last working day as governor, a private equity fund represented by Optima and Quartz Befektetési Alapkezelő Zrt. concluded what prosecutors called a sham securities lending agreement. Its real purpose, the office said, was to hand control over the PADME Foundation's assets to a circle of people over whom Matolcsy would keep influence after his term ended, "with the aim that he and his son could make investments with the assets for their own purposes in order to make a profit."

The prosecutors said the transfer gave the fund ownership control of an asset manager handling assets with a market value of nearly 200 billion forints, causing a loss that "cannot currently be precisely determined" but significantly exceeds the 500 million forint threshold for a particularly significant loss.

Prosecutors searched several locations and seized evidence with the help of the National Bureau of Investigation, the Budapest police, the National Protective Service and the Standby Police, the office said.

Lawyer's response

Matolcsy's lawyer, Pál Bátki, told Reuters his client had been detained. "The suspicion against my client can be summarized as a very complex set of allegations, which we have not yet had the opportunity to fully review and process," he said, according to Reuters.

The news site Telex, citing Bátki, said Matolcsy was questioned over suspected fraud causing significant financial losses and the use of a forged private document, and that prosecutors were seeking to arrest him, with a court to decide this week, Reuters reported.

Matolcsy said in April that the central bank had no legal mandate to interfere in the foundations' operations because they "were acting independently," according to Reuters.

Background

Prosecutors and police have been examining since early 2025 how more than 266 billion forints ($817 million) of central bank money moved through a network of foundations and companies, after a State Audit Office report raised concerns about investments by a central bank foundation and by Optima, Reuters reported. In May, prosecutors and police seized about 92 billion forints ($300 million) in funds and securities in a related money-laundering investigation, according to Reuters.

Prime Minister Péter Magyar, who ousted Viktor Orbán in an April election, has said the central bank's past operations must be investigated, and his ruling party has set up a parliamentary committee for that purpose, Reuters reported.

What is not known

Prosecutors did not name the two people for whom they sought international arrest warrants, the fund representative or the lawyer who was detained, and they did not say whether a court has issued the warrants. No court had ruled on any arrest request as of 6:09 p.m. ET.

No charges have been filed in court; Matolcsy and the others are suspects, and the prosecutors said they would not release further details for now to protect the investigation.