Financial Stability Committee – macroprudential authority
On the basis of the Act on macroprudential supervision over the financial system and crisis management, which entered into force on 1 November 2015, the Financial Stability Committee is a competent authority responsible for macroprudential supervision in Poland.
The Financial Stability Committee was initially created in 2008 as a cooperation platform to coordinate actions undertaken to support and maintain stability of the domestic financial system. The Act on macroprudential supervision over the financial system and crisis management widened the mandate of the FSC to also include macroprudential supervision. In consequence, the FSC has a dual mandate. It is responsible for shaping macroprudential policy as well as for coordinating actions within crisis management. Works within the area of:
- macroprudential supervision are chaired by the Governor of NBP and NBP provides the secretariat for the FSC,
- crisis management are chaired by the Minister of Finance and the Ministry of Finance provides the secretariat for the FSC.
The Financial Stability Committee comprises four main financial safety net institutions, i.e. Narodowy Bank Polski, the Financial Supervision Authority, the Ministry of Finance and the Bank Guarantee Fund.
- Governor of Narodowy Bank Polski – Adam Glapiński,
- Minister of Finance – Magdalena Rzeczkowska,
- President of the Financial Supervision Authority – Jacek Jastrzębski,
- President of the Bank Guarantee Fund – Piotr Tomaszewski.
The Governor of NBP is the chairman of the FSC in the area of macroprudential supervision .
The primary task of the Financial Stability Committee is to identify, assess and monitor systemic risk stemming from the financial system or its environment. The FSC, as a collegial body, also serves as a platform for the proper exchange of information between members of the Committee and their institutions, in order to fulfil the tasks conferred on it. The FSC identifies the institutions whose behaviour or problems may generate risk for the continuous functioning of the financial system or its significant part.
The second crucial task of the FSC is to initiate actions to contain identified threats to financial stability. For this purpose, the Committee is entitled to issue recommendations directed at particular addressees or present its statements. The FSC as a Polish macroprudential authority cooperates with the European Systemic Risk Board (ESRB), other European Union authorities, macroprudential authorities of the Member States or third countries, as well as with international institutions.
The Financial Stability Committee as the macroprudential authority has at its disposal only “soft law” instruments. For the purpose of performing its duties the FSC may issue the following:
- statements – issued when sources of systemic risk are identified within the financial system or its environment. Statements are aimed at drawing the attention of market participants to identified potential threats for financial stability. They might be addressed to entities of the financial system or its part, as well as to the member institutions of the FSC, i.e. the Financial Supervision Authority, the Minister of Finance, the Bank Guarantee Fund or Narodowy Bank Polski.
- recommendations – issued when it is necessary to undertake actions to constrain systemic risk. Recommendations might be addressed at the member institutions of the FSC, i.e. the Financial Supervision Authority, the Minister of Finance, the Bank Guarantee Fund or Narodowy Bank Polski. The addressees of a recommendation are obliged to undertake recommended actions or to explain the reasons for inaction. In particular, recommendations may specify the need for application or recalibration of macroprudential instruments by the Minister of Finance by means of a regulation or undertaking supervisory actions by the Financial Supervision Authority.
Macroprudential instruments are implemented by relevant financial safety net institutions in accordance with their competences. The Act on macroprudential supervision over the financial system and crisis management indicates that the Minister of Finance is the designated authority and is authorized to determine by means of a regulation:
- the level of the countercyclical capital buffer rate and recognition of the level of the countercyclical capital buffer rate for the other Member State or third country;
- the level of the systemic risk buffer rate and recognition of the level of the systemic risk buffer rate for other Member States;
- the national measures of Article 458 of the Regulation No 575/2013, concerning the level of own funds, level of the capital conservation buffer, requirements for large exposures, liquidity requirements, risk weights for targeting asset bubbles in the residential and commercial property sector, intra financial sector exposures, the public disclosure requirements.
The Financial Supervision Authority is authorized to issue administrative decisions, after obtaining the opinion of the FSC, on the following:
- determination on a consolidated basis of the Global Systemically Important Institutions, their relevant category and their buffer rate;
- determination on an individual, sub-consolidated or consolidated basis of the Other Systemically Important Institutions and their buffer rate.
In order to perform its tasks the FSC is entitled to initiate the process of applying other instruments not mentioned above, in particular in the form of financial regulations.