Press release after the meeting of the Financial Stability Committee on macroprudential supervision

• Paweł Szałamacha, Member of the Management Board of Narodowy Bank Polski as the Chair of the Committee,
• Piotr Patkowski, Undersecretary of State, Ministry of Finance,
• Jacek Jastrzębski, Chairman of the Polish Financial Supervision Authority,
• Piotr Tomaszewski, President of the Management Board of the Bank Guarantee Fund.

The Committee briefed itself on the NBP Financial Stability Report. June 2023 and the results of the systemic risk source assessment survey conducted on a regular basis among institutions represented in the Committee. In the opinion of the Committee, the legal risk of FX housing loans and the risk of reduced capital surpluses and credit rationing remain the most significant vulnerabilities of the domestic financial system.

The committee discussed the potential impact of the 15 June 2023 judgments of the Court of Justice of the European Union (CJEU) in Case C-520/21 and Case C-287/22 on the position of banks that hold portfolios of FX housing loans. In the opinion of members of the Committee, the said judgments will not change significantly the prevailing line of judgment of Polish common courts in FX housing loan cases, which is unfavourable for banks. One may probably expect banks to increase legal risk provisioning for FX housing loan portfolios at a faster pace than the one observed in recent years. The value of further provisions will depend on the rate at which new lawsuits will be filed with courts and on the line of judgment of national courts which – in line with the CJEU judgment – should examine the cases in the light of all the facts of the dispute, taking also into consideration the principle of proportionality. According to the Committee members’ assessment, costs of additional provisions should not put financial stability at risk provided that they are borne gradually and no new regulatory and legal requirements are imposed on banks or other shocks will materialize. However, the costs will substantially reduce the capacity of banks to increase capital, which will worsen the prospects of the provision of financing to the economy.

At the same time, the Committee continues to uphold the opinions voiced in its Resolution No 14/2017 and in other statements, according to which banks and their clients should seek to settle their disputes regarding FX housing loans amicably, and legal solutions should not ignore rules of economics and social justice. It should also be stressed that according to the CJEU ruling it is for the national court to examine, in the light of all the facts of the dispute, whether upholding additional claims on the part of the consumer is in accordance with the principle of proportionality.

In the opinion of the Committee, settlements are the best way for resolving bank-client disputes, therefore it has considered it advisable to extend the term of the Regulation of the Minister of Finance on reduced risk weights for FX housing loans under the process of settlement.

The Committee also discussed the current trends on the domestic residential real estate market. A fall in real prices of apartments and stabilisation of nominal prices has been observed. In monthly and quarterly terms, the demand for housing loans is on the rise – the number of loan applications as well as the value of the loans have increased.

The Committee examined the draft amendments to Recommendation S of the Polish Financial Supervision Authority. In its opinion, the Committee also commented on the new proposals of good practices related to managing mortgage-secured credit exposures covered by the government programme of own contribution guarantees and interest rate subsidies on loans.

Performing its statutory duties, the Committee passed a resolution on a recommendation addressed to the Minister of Finance on a countercyclical buffer rate. According to the results of a respective analysis, the applicable countercyclical capital buffer rate of 0% is adequate and there are no reasons to change it. The representative of the Minister of Finance agreed with the recommendation and acknowledged that there is no need to take legislative action in this area.

The Committee adopted the Annual Report on Macroprudential Supervision Activity of the Financial Stability Committee 2022. The Committee’s Report fulfils the obligations indicated in the Act on Macroprudential Supervision and will be submitted to the Polish Sejm by the Governor of Narodowy Bank Polski – the Chair of the Financial Stability Committee, and posted on the NBP website.

Implementing the European Systemic Risk Committee recommendation (ESRB/2015/2) on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures, the Committee studied the results of analyses on the Polish banking sector’s exposures to Belgium, Norway and Sweden and concluded that there are still no reasons to take decision on the reciprocation of macroprudential measures implemented in these countries. Moreover, the Committee decided to submit to the ESRB information on the non-identification of relevant third countries for the purposes of recognizing and setting a countercyclical buffer rate.

The next regular meeting of the Committee on macroprudential supervision has been scheduled for September 2023.