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

• Artur Soboń, Member of the Management Board of Narodowy Bank Polski, as the Chair of the Committee,
• Jurand Drop, Undersecretary of State at the Ministry of Finance,
• Jacek Jastrzębski, Chairman of the Polish Financial Supervision Authority,
• Maciej Szczęsny, President of the Management Board of the Bank Guarantee Fund.

Performing its statutory duties, the Financial Stability Committee (FSC) passed a resolution in which it upheld its recommendation for the Minister of Finance of 14 June 2024 on setting the countercyclical capital buffer rate. The target countercyclical capital buffer rate recommended by the Committee was 2%, and that level was to be achieved in stages. The representative of the Minister of Finance accepted the recommendation and informed about the progress of the legislative work aimed at issuing the regulation setting the countercyclical capital buffer rate at 1% after one year from the announcement of the regulation.

The quarterly systemic risk source assessment survey, conducted on a regular basis among the institutions represented in the FSC, shows that the legal risk of FX housing loans remains a major source of systemic risk. The Committee was of the opinion that the risk of reduced capital surpluses and credit rationing ceased to be of systemic nature and thus removed it from the list of vulnerabilities of the Polish financial system.

The Committee discussed the current trends in the Polish residential immovable property market. Recently, nominal and real housing prices had grown further. Supply in the biggest cities had gradually recovered. Demand for housing loans remained low and a large part of purchase transactions in the housing market did not involve credit. The quality of the housing loans portfolio was at a stable and safe level.

The Committee assessed the adequacy of the higher risk weights used in Poland. The following issues were identified in the course of analyses:

1. evolution of the risk associated with both the FX loan portfolio and the commercial real estate loan portfolio,
2. entry into force from January 2025 of the amended CRR[1] provisions significantly modifying the current approach to the use of risk weights.

Considering the results of the analyses, the Committee issued recommendations addressed to the Minister of Finance and the Polish Financial Supervision Authority, concerning the management of the risk of exposures secured by mortgage on immovable property, in which the Committee proposes repealing the regulation of the Minister of Development and Finance[2] and updating the KNF’s methodology of setting additional capital requirements for banks regarding their own funds.

In connection with the questions referred to the Court of Justice of the European Union for a preliminary ruling (case No. C-471/24), the Committee again discussed the matter of undermining the reliability and representativeness of the WIBOR interest rate benchmark. Deeming the matter as important, the Committee decided to issue a separate press release on this matter.

On request of the KNF, the Committee issued opinions regarding the identification and the setting of appropriate buffers on other systemically important institutions (O-SIIs).

Implementing Recommendation of the European Systemic Risk Board ERSB/2015/2 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures, the Committee reviewed:

• the results of the monitoring of the Polish banking sector’s exposures in Luxembourg, Germany and Sweden,
• analyses concerning the Polish banking sector’s exposures in Denmark and Italy;

and decided that there were reasons allowing Poland not to reciprocate the macroprudential measures implemented in those countries.

The Committee took note of the review of the macroprudential policies pursued by individual countries and at the European Union level.

The Financial Stability Committee stands in solidarity with the inhabitants of southern Poland affected by the flood. The Committee discussed the measures taken by financial institutions and the financial safety net institutions to support the fight against the effects of flooding.

The next regular meeting of the Committee on macroprudential supervision has been scheduled for December 2024.

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[1] Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1–337, as amended).

[2] Regulation of the Minister of Development and Finance of 25 May 2017 concerning the higher risk weights for exposures secured by a mortgage on immovable property (Journal of Laws 2023, item 1751 and item 2047).