The meeting of the Financial Stability Committee on macroprudential supervision was held on 25 March 2022. The following persons participated in the meeting:
- 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.
Performing its statutory duties, the Committee passed a resolution on a recommendation addressed to the Minister of Finance on maintaining the countercyclical buffer rate at 0% in the first quarter of 2022. 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.
Members of the Committee discussed the sources of risk in the Polish financial system and its environment, identified in the survey conducted among institutions represented in the Financial Stability Committee. According to the Committee, a new systemic risk, i.e. geopolitical risk, stemming from the Russian Federation’s armed aggression against Ukraine, has materialised. The shock associated with the situation may materialise via a number of channels, however – considering the Polish banking sector’s holdings of capital and liquidity buffers – it is resilient to such a shock. The Committee appreciates the activities of banks aimed at supporting Ukraine’s refugees and enabling them to use financial services, and also encourages banks to continue to step up their efforts. At the same time, the Committee stated that the low profitability of banks and their credit losses directly related to the COVID-19 pandemic are no longer a significant source of risk to banks.
The legal risk of FX housing loans remains the major risk to financial stability identified by the Committee. The Committee noted with concern that the number of court cases regarding the loans continues to grow and a significant portion of cases end in annulment of the loan agreement.
In the Committee’s opinion, the rulings resulting in an annulment of the loan agreement, and also violating the economic logic of settlements between the parties to the agreement following the annulment, are not proportional to the effects of the most frequently challenged contractual provisions; they disrupt the functioning of core market mechanisms and generate material burdens on the banking sector. This may ultimately result in undermining its resilience, producing negative consequences to depositors and to the capacity of banks to continue to finance the development of Poland’s economy.
According to the Committee’s view, it is reasonable to recall the publicly available statements presented by NBP and the Office of the Polish Financial Supervision Authority in connection with the proceedings before the Supreme Court of the Republic of Poland. The legal system should not overlook the rules of economics and social justice, and – in an unjustified manner – lead to the preferential treatment of FX loan holders over those persons who chose to take zloty loans in order, for example, to avert FX risk. The abusive nature of contractual clauses in FX loan agreements – the issue raised by borrowers – cannot be instrumentalised for the purposes of avoiding the adverse impacts of the concluded agreement related to FX risk materialisation. In line with market economy principles, including the principle of the remuneration and the equivalence of benefits, the provision of financial capital should correspond with the obligation to return it as well as payment of the remuneration from the user of the capital, at least in the amount covering the costs incurred.
The Committee got acquainted with the implementation by certain banks of settlements with clients and stated that amicable solutions remain a valuable alternative to dispute resolution through the judicial system.
The Committee discussed current trends on the domestic residential real estate market. The Committee said that at the current stage various phenomena impacting the market are clashing, and the situation related to the war in Ukraine is an additional source of uncertainty. Slower lending growth, resulting from higher interest rates and banks’ tighter lending, is a factor contributing to reducing price pressures. On the other hand, constraints related to a lack of suitable land, labour force shortages and the growing costs of construction materials persist on the supply side.
According to the Committee’s assessment, the current rise in housing loan servicing costs should not put at risk a timely repayment of loans by borrowers. This is because banks use the conservative creditworthiness assessment requirements, developments on the labour market are positive and wages are growing on a regular basis. Furthermore, the share of loans originating at a time when interest rates were at all-time lows is relatively small. In this context, the Committee pointed out that the borrowers who find increasing loan instalments too burdensome on their income may seek aid from the Borrowers’ Support Fund (FWK). According to the Committee, the amount of funds provided by the Fund is insignificant, which may confirm that there have been no problems in loan repayment or may be evidence of the fact that borrowers have been not sufficiently aware of the aid. The Committee concluded that the obligation put on banks to inform clients properly about the possibility to use FWK funds should be considered.
The Committee carried out a review of the methodology of identifying the other systemically important institutions (O-SII) buffer. The review findings will be on the agenda of further work of the Committee and form the basis for a recommendation on the issue.
Implementing the Recommendation (ESRB/2015/2) 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 analyses on the Polish banking sector’s exposures to the Netherlands and Lithuania and concluded that there are reasons justifying non-reciprocity of the macroprudential instruments introduced in the two countries.
The next regular meeting of the Committee on macroprudential supervision is scheduled for the second quarter of 2022.