The meeting of the Financial Stability Committee of 21 December 2023 was attended by:
• Artur Soboń, Member of the Management Board of Narodowy Bank Polski as the Chair of the Committee,
• Jurand Drop, 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 capital buffer rate at 0% in the fourth 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 regard.
The Committee continued to discuss whether it is necessary to re-apply the macroprudential capital buffer in Poland’s banking system after the systemic risk buffer was released in 2020. The Committee members agreed that at the present stage an implementation of the neutral non-zero countercyclical capital buffer is the best outcome. The Committee determined that the process should take place gradually and be properly correlated with the dividend policy requirements of the Polish Financial Supervision Authority. The scheduled date for a recommendation of the Committee on this matter is March 2024.
As part of the standing item on the agenda of the meetings of the Committee, its members 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 Financial Stability Committee (FSC). The legal risk of FX housing loans remains the major source of risk. The hierarchy of risk sources has slightly changed – geopolitical risk is currently assessed as slightly higher and the risk of reduced capital surpluses and credit rationing has abated. The Committee also studied the conclusions from the latest NBP Financial Stability Report. December 2023. It follows from the Report that the domestic banking sector remains resilient and the balance of risks has improved. The risk of credit rationing, previously assessed as significant, is declining as the capital position of banks is improving. Traditional risks faced by banks, i.e. credit risk, market risk, interest rate risk and liquidity risk, currently do not pose threats to financial stability.
As part of the analysis of the situation on the domestic real market carried out on a regular basis, the Committee studied the evolution of current financing and pricing trends on this market. The annual growth rates of złoty housing loans remain negative; however, lending is gradually recovering and monthly loan increases have been positive since June 2023. The use of the ”Safe 2% Mortgage” programme has had a significant impact on boosting lending. At the end of November 2023, the funding provided under the programme accounted for over 60% of new loans in this market segment. At the same time, a rise in demand for dwellings and a fall in the number of sale offers and of ongoing housing constructions were observed. Those developments resulted in an increase in housing prices, both in nominal and real terms. The Committee also discussed developments on the commercial real estate market, pointing out that the exposures of Polish banks to this market are still relatively low and are diversified by the type of commercial real estate (office real estate, retail real estate, warehouse real estate and other). The analysis of available data has not shown excessive risk, which arises from the funding provided to the commercial real estate market, to the Polish banking sector.
For the purposes of assessing risk to the financial market infrastructure, the Committee was presented with main conclusions from the Polish Payment System Oversight Report 2022 prepared by Narodowy Bank Polski.
At the meeting, the Committee was briefed on the current phase 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 examined a summary of the implementation of the recommendation concerning measures to support the stable functioning of cooperative banks (Resolution No. 46/2021), the recommendation concerning measures to support the stable functioning of the sector of cooperative savings and credit unions (Resolution No. 48/2021) and activities in relation to the statement on the functioning of the cooperative banking sector (Resolution No. 47/2021). The Committee considered the recommendations and demands expressed in the statement to be fulfilled.
Implementing the European Systemic Risk Board (ESRB) recommendation on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures, the Committee examined the results of the monitoring of the Polish banking sector’s exposures to Belgium and concluded that there were reasons justifying non-reciprocity for the macroprudential instrument introduced there.
The Committee members were presented with a review of macroprudential policy conducted in the European Union and by specific member states.
The next regular meeting of the Committee on macroprudential supervision has been scheduled for March 2024.