Júlia Király, head of the Department of Economics and Finance at IBS was the guest of our latest alumni eve.
She is teaching also at the Corvinus University and is Member of the Board of the Belgian KBC Bank. From mid 2007 till April 2013 she was serving as Deputy Governor of the Central Bank of Hungary. László Szepesi, Pro-Rector of IBS, played the role of the host on that evening and introduced Ms Király as the “Queen of the Hungarian banking sector”, who has been around in the most challenging times.
Júlia Király has a colourful and strong personality. She characterized herself as a black cat who appears to bring misfortune to whatever she is associated with: she was born in a socialist country and within 32 years socialism collapsed; when Mr. András Simor, the governor of the central bank invited her for the deputy chair position in 2007, all the financial markets collapsed within two weeks. Hopefully, the series will not continue as she is now at IBS... This short self-introduction set the tone of the evening. It was a relaxed conversation between Júlia Király and László Szepesi, at the same time they went into serious professional issues in informal and amusing ways.
One of the most interesting points of the evening was how she described her personal experience of the financial crisis of 2007-2008. As she put it, “In 2007 my dream was that when I leave the central bank in 2013, Hungary would be the member of the Eurozone. We stabilize this economy.” But soon after they began to sense a crisis situation. Nobody expected though, that this would last longer than a few months, neither that this might be deeper than previous crises. They also trusted the great crisis managers the central bank had close connection with, like the chairman of the US Federal Reserve, Ben Bernanke. Then in September the Lehman Brothers’ collapse came and that changed everything. The world faced the biggest and deepest financial crises of the century. As Ms. Király explained, the Lehman case triggered a systemic crisis and as such was a good example of how the network theory works in practice rather than a typical subject of the economic or banking science. Lehman was a focal point of the financial market and - as the acknowledged network scientist, Albert László Barabási says - if one of the central points of a network falls out, then the whole network will collapse. During the night we learnt a lot about the way the central bank works, its staff and even about the building. The “famous” third floor in the Hungarian Central Bank main building is reserved for the management level. In earlier times the governor and the deputy governor had their offices and their families were also living here. Nowadays the third floor still hosts the management and here are the closest workmates of the governor, too. On the fourth level there are “The Staff”. They are mainly young people of 30 to 38 years of age, having a PhD or MA, including quite a few who graduated from IBS. They prepare the materials for decision making.
László Szepesi asked Júlia Király about her experiences as a woman in the male-dominatedbanking world. Indeed, there are not too many women on top management level in the banking sector. In the Monetary Council however, there are generally two or more ladies. Its meetings are absolutely confidential as the decisions have an immediate and huge impact both on the stock market and the currency. Any information, even if somebody is walking out of the room smiling, could be interpreted by somebody else as an insider information. No phones, no nothing are allowed in the meeting room. These Monetary Council meetings start at 10 a.m. and end at 2 p.m. If for some specific reason anyone has to leave the room during these four hours, he or she should go to that special place with an escort. According to urban legend, this is why the council has at least two ladies, so that they can also leave together for the restroom during the meetings.
It turned out that in the past 200 years, Ms. Király was and still is the only one woman at the deputy governor level. So, Hungary is not doing very well in terms of gender equality. Julia supports the woman quota system and her advice to the female students in the room was, “Never mind the quota, if you are already there - you are doing better than men. Two ladies can save the world, Mme Merkel and Mme Lagarde. We are the best in risk management.” The students were not shy with their questions. A student asked her if she keeps her own personal fortune in Hungarian Forint, Euro or other currency and whether it’s kept in Hungary or elsewhere. The good news is that one of the number one Hungarian bank experts has her assets in Hungarian banks and has not deposited money abroad. “If I survived the financial crisis, why should I do it now?” This was an optimistic and promising message that we could take home.