Österreichisch-Ungarische Bank / Osztrák-Magyar Bank (OUB/OMB)

1878, federalized in 1924

Main Joint Offices Vienna (German Austria) and Budapest (Hungary), and 14 auxiliary branches

The Austrian-Hungarian Bank (OUB/OMB) chartered in 1878, is the central bank of the Federal State and issues the Krone. Its joint central offices are in Vienna and Budapest.

History OUB/OMB

The OUB/OMB was originally chartered has the central bank of Austria and Hungary, each ancient kingdom owing 50% of the property. The main organ of decision was the General Meeting that discussed and voted the general proposals of policy of the bank and elected the General Council in charge of the daily administration. Its dualistic character was embodied in its two managements and head offices in Vienna and Budapest that its still keep until today. There is an ongoing debate of establishing a third joint office in Prague, due to the industrial development of Bohemia.

Federalization of OUB/OMB

Between 1920 and 1924 the OUM/OMB functioned has the central and commercial bank between the governments of the Federation and the States. Although loans at federal and state level were raised by Postsparkasse/Postatakarékpénztár (PSK/PTP, former Österreichische Postsparkasse and Magyar Királyi Postatakarékpénztár). On recommendations of the Young Committee it was decided to establish a central bank and sort out all commercial activities to the states or the PSK/PTP.

The main aspects of the federalization of the OUB/OMB (Law on the organization the Austrian-Hungarian Bank of 1924) are:

  • Establishment of a new central bank under the same name of the previous one. Mandated the sale of the bank action in hands of the states of German-Austria and Hungary to the federal government.
  • The new OUB/OMB would be administered by the Central Bank Council which compromises a President, two Vice-presidents and 4 directors elected for a term of 6 years by the Federal Assembly in joint session upon proposal of the Federal Council of Ministers. It must have at least two native speakers of German and Hungarian among the the members of the Council
  • The establishment of auxiliary branches in the 14 state capitals.
  • The auxiliary branches of the OUB/OMB must in a period of 12 months discharge to the state banks and the PSK/PTP all functions that are not specified in the law (commercial and personal banking)
  • Each auxiliary office will a have Consulting Committee integrated representatives of the state and private banks that will serve to recommend and advice the General Council on matters of regulating and supervising the banking industry
  • The OUB/OMB will not be affiliated, participate in the property or own any state banks and the Postsparkasse / Postatakarékpénztár (PSK/PTP).
  • OUB/OMB will have the register and functions of licensing, along the Ministry of Finances, of all private banks within the Federation. It will advise on the establishment of State banks.
  • Supervise, along the Federal Ministry of Finances the PSK/PTP

Functions of the Austrian-Hungarian Bank

The functions of the OUB/OMB, are:

  • Implementing monetary policy
  • Determining Interest rates
  • Controlling the nation's entire money supply
  • Serves as a banker's bank and as the government's bank. Providing banking services to depository institutions and to the federal and state governments
  • Has the authority to act as lender of last resort by extending credit to depository institutions or to other entities in unusual circumstances involving a national or regional emergency, where failure to obtain credit would have a severe adverse impact on the economy
  • Managing the country's foreign exchange and gold and currency reserves
  • Regulating and supervising the banking industry
  • Setting the official interest rate – used to manage both inflation and the country's exchange_rate exchange rate] – and ensuring that this rate takes effect via a variety of policy mechanisms
  • Guaranteer of all loans and debts of the federal government.

Danubian Banking System

The OUB/OMB, state banks and the PSK/PTP are part of the Danubian Banking System.

Members Danubian Banking System
StateCentral Bankstate bankpostal savings bank
Austria-Hungary Austrian-Hungarian Bank (OUB/OMB) / State branches/Offices of PSK/PTP
Bohemia / Czech National Bank (Česká národní banka, ČNB) Poštovní spořitelna
German Austria / Austrian National Bank (Oesterreichische Nationalbank, OeNB) PSK-Österreich
German Bohemia / Landesbank of Bohemia and Silesia (Landesbank des Bohemia und Silesia LBS) Bohemia-PSK
Hungary / Hungarian National Bank (Magyar Nemzeti Bank) Magyar PTP
Illyria / Illyrian National Bank Poštanska Banka
Istria / Public Bank of Istria and Trentino State branch of PSK/PTP
Ruthenia (former East Galicia) / Ruthenian Investment and Development Bank Poshtovyy bank
Silesia / Landesbank of Bohemia and Silesia (Landesbank des Bohemia und Silesia LBS) Silesia-PSK
Slovakia / National Bank of Slovakia (Národná banka Slovenska, NBS) Poštové Banka
Slovenia (former Carniola) / Public Bank of Slovenia (Javno Banka Slovenije JBS) Poštna Banka
Szeklerland / Szeklerland Public Bank Szeklerland PTP
Transylvania / Public Bank of Transylvania (Banca publică a Transilvaniei BPT) Banco Poștal
Trentino / Public Bank of Istria and Trentino Banca Postale
West Galicia (until 1926) / National Bank of West Galicia Bank Pocztowy

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