Financial Stability Report. June 2025

Date of publication:

Poland’s financial system is stable and the banking sector, which is its key element, re-mains resilient to shocks.

The systemic risk in the domestic financial system remains limited. Traditional bank risks, i.e. credit risk, liquidity risk, interest rate risk and FX risk, are at a moderate or low level.

Banks’ excess capital and high profits provide room for loss absorption, as well as for lending expansion even in pessimistic stress test scenarios.

The key risks in the financial system are of a structural nature and are primarily associated with legal and regulatory risk. Banks still need to make reserves related to the FX housing loan portfolio, but the scale of the associated costs diminishes. Currently, legal uncertainty starts to apply to the portfolio of zloty-denominated loans.

A substantial reduction in financing the real economy by the banking system has been observed for some time. At the same time the development of the non-banking part of the financial sector has been limited. As a result the financial system is less effective in fulfilling its primary functions in the economy. Both public and financial institutions need to reflect upon this phenomenon.

In the opinion of Narodowy Bank Polski, implementation of the following recommendationswill be conducive to maintaining domestic financial stability:

  • Reduction of legal and regulatory risks in which the financial system is functioning,
  • Proportional consumer protection with a view to differentiating the sanctions,
  • Banks should be actively looking for ways to increase lending, especially to enterprises,
  • Determination in finalisation of the reform of interest rate benchmarks in Poland,
  • Continuation of settlements in FX loans,
  • Banks should ensure that the MREL-RCA is fully covered with eligible debt instruments,
  • Review of the Long-term Funding Ratio (WFD) is advisable,
  • The cooperative banking sector should strengthen its interest rate risk management and continue efforts to reverse the negative trend in the number of shareholders,
  • High share of expected profits included in future premiums in own funds and double gearing of capital should be taken into account in solvency assessment of the insurance companies,
  • Life insurance companies should add annuities to their product range and seek to ensure that the value for customers in contracts is appropriate,
  • Insurance companies should effectively communicate the scope of insurance cover and the amount of claims to be paid to their clients,
  • Open-ended investment funds should reduce liquidity mismatch between assets and liabilities.
Financial Stability Report