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

Performing its statutory duties, the Committee passed a resolution on a recommendation addressed to the Minister of Finance on maintaining the countercyclical capital buffer rate at 0% in the third quarter of 2023. The representative of the Minister of Finance agreed with the recommendation and acknowledged that there was no need to take legislative action in this area. The Committee discussed the appropriateness and possibilities of introducing the non-zero neutral countercyclical capital buffer (nNBA[1]) in Poland. This requirement is becoming increasingly widespread in EU countries. The primary objective of the introduction of the nNBA would be to create a releasable macroprudential buffer which could be released in the event of an unexpected, unpredictable shock (such as the COVID-19 pandemic). The Committee pointed out that before March 2020 Poland had applied a systemic risk buffer, which was repealed in response to the COVID-19 pandemic shock, which in turn released banks’ capital worth approx. PLN 30 billion. The pandemic risk ceased to be regarded by the FSC-M as systemic and, under the current circumstances, the conditions are favourable for re-establishing – without negative side effects – a non-zero capital buffer rate. The Committee agreed that this requires further analysis and a holistic approach of macro- and microprudential policy so that the change does not trigger a sharp rise in capital requirements in the banking sector.

The Committee discussed the sources of risk in the Polish financial system and its environment, identified in the survey conducted on a regular basis among institutions represented in the Committee. In the opinion of the Committee, the hierarchy of risk sources has not changed as compared to the situation in the previous quarter. The legal risk of FX housing loans and the risk of reduced capital surpluses and credit rationing remain the most significant sources of risk to the financial system. Geopolitical risk also remains heightened. On the other hand, risk associated with the residential real estate market, the risk resulting from vulnerabilities of certain institutions and financial contagion risk were assessed as moderate.

The Committee summarised the current trends on the domestic residential real estate market. In the second quarter of 2023, a rise in nominal prices of apartments has been observed along with a downward trend in their real prices. The Committee also noted a marked rise in the demand for housing loans, which is largely a result of the “2% Safe Mortgage” government programme. 

The Committee examined the current stage of implementation of borrower support programmes for: (i) the use of the so-called loan repayment holidays and (ii) assistance from the Borrowers’ Support Fund as well as their impact on the financial situation of banks.

The Committee members exchanged views on the concepts of long-term financing of mortgage loans and the introduction of a long-term financing ratio (WFD) indicator, presented during the meeting by representatives of the Office of the Polish Financial Supervision Authority.

The Committee members discussed the results of the review of the identification of other systemically important institutions (O-SII) and the calibration of the O-SII buffers.

Implementing the recommendation of the European Systemic Risk Board on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures, the Committee studied the results of:

– the monitoring of the exposures of the Polish banking sector to Luxembourg and Germany,

– analyses of the exposures of the Polish banking system to Sweden,

in both concluding that there are reasons justifying non-reciprocity of the macroprudential instruments introduced in these countries. Moreover, the Committee members adopted a methodology of the monitoring and assessment of cross-border effects for the purposes of implementing recommendations (ESRB/2015/2).

The Committee examined the review of macroeconomic policy conducted by particular countries and in the European Union.

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

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[1] Abbreviation derived from the Polish name of the buffer. In European publications the buffer is called nCCyB (non-zero neutral countercyclical capital buffer).