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

Date of publication:

The meeting of the Financial Stability Committee (FSC) on macroprudential supervision was held on 19 March 2021. 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 2021 and also decided to provide information on its level and underlying indicators to the European Systemic Risk Board (ESRB). The representative of the Minister of Finance agreed with the recommendation and acknowledged that there is no need to take legislative measures in this area.

Members of the Committee discussed the sources of risk in the Polish financial system indicated in the survey carried out among the institutions represented in the FSC. According to the Committee, the legal risk associated with the portfolio of FX housing loans has increased. As the number of agreements which are the subject of judicial proceedings rises, banks are systematically increasing provisions for legal risk. The ruling of the full Court of the Civil Chamber of the Supreme Court of the Republic of Poland, scheduled for 13 April 2021, may have a significant impact on the further evolution of these costs. The Committee got acquainted with the latest reports on this risk and the progress of the work on the proposal of the out-of-court settlement of disputes concerning FX loans and acknowledged the need to continue monitoring the situation in this area. The Committee again considered the reduced profitability of banks to be another and significant source of risk in the domestic financial system. Following the completion of the Polish Financial Supervision Authority procedure to issue an authorisation for GPW Benchmark S.A. to conduct business activity as an interest rate benchmarks administrator, the Committee considered that risk related to the untimely adjustment of the WIBOR benchmark to EU law has expired.

The Committee also took note of an overview of analyses of current trends on the domestic residential real estate market, which point to continued growth in activity on this market. At the same time, the banks’ existing excess capital and their sound liquidity position do not create barriers to lending on the supply side. In the Committee’s opinion, risk associated with the residential real estate market has declined.

The Committee accepted the results of the work of the Working Group on the analysis of the situation in the cooperative banking sector and the credit union sector. The Working Group has prepared draft documents with proposals of possible actions to be taken to support the stable functioning of the sector of cooperative banks and the sector of credit unions. Considering the need to support the stable development of the sectors, and systemic risk stemming from the weakness of some institutions, the Committee passed the following resolutions on:

  • recommendations of actions to support the stable functioning of cooperative banks,
  • recommendations of actions to support the stable functioning of cooperative savings and credit unions, and
  • a statement concerning the functioning of the cooperative banking sector.

At the same time, considering potential impediments to the functioning of the above-mentioned sectors, which emerged from the analyses, the decision was made to address letters to:

  • the Minister of Agriculture and Rural Development on the mechanism for granting interest subsidies on loans granted by banks for investments and projects related to agricultural production and its development, so-called preferential loans, and
  • the President of the Office of Competition and Consumer Protection on the approach to considering a unified product and service offer as price fixing.

The Committee wishes to point out here that the commitment and determination of the stakeholders themselves are a condition sine qua non for the success of the process of the cooperative banking sector and the credit union sector development.

Members of the Committee discussed conclusions from the NBP Polish Payment System Oversight Report for 2019 from the point of view of the systemic risk of a macroprudential nature of infrastructure and payment and settlement systems.

The Committee took note of the information on the need to establish in Polish law a resolution authority for insurance and re-insurance companies and central counterparties for the purposes of fulfilling obligations resulting from the relevant EU regulations.

The Committee took the decision to provide the ESRB with information on the lack of material exposures of Polish banks to the French sector of non-financial corporations in connection with a use of the reciprocity mechanism for macroprudential instruments adopted in other countries.

The next regular meeting of the Committee on macroprudential supervision is scheduled for the second quarter of 2021.