Press release after the meeting of the Financial Stability Committee on macroprudential supervisionDate: 28-09-2021
The meeting of the Financial Stability Committee (FSC) held on 28 September 2021 was attended by the following persons:
- 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 the recommendation addressed to the Minister of Finance on maintaining the countercyclical buffer rate at 0% in the third quarter of 2021. The Ministry of Finance representative agreed with the recommendation and acknowledged that there is no need to take legislative measures in this area.
The members of the Committee discussed the sources of risk in the Polish financial system and its environment, which were identified in the regular survey. According to the Committee’s assessment, the nature and hierarchy of risk sources had not changed from the previous quarter. The legal risk associated with the portfolio of FX housing loans and the difficult financial condition of certain credit institutions, also in the context of the potential contagion effect, remain the major sources of risk to the financial system.
The Committee took note of an overview of current trends in the domestic residential real estate market. They indicate that increases in transaction prices are observed; however, in real terms, which take into account the pace of growth of the economy and wages, the increases remain contained. Lending characteristics do not point to an excessive easing of lending standards, and the applicable recommendations issued by the Polish Financial Supervision Authority reduce the risk.
Supporting the process of reaching agreements by banks and borrowers on a voluntary basis, initiated by the FSC resolution of 13 January 2017 on the recommendation on the restructuring of the FX housing loans portfolio, the Committee decided to address to the Minister of Finance and the Polish Financial Supervision Authority a resolution on a temporary change in the level of risk weights for institutions actively involved in the process.
Acting on the request of the Polish Financial Supervision Authority, the Committee issued an opinion on the identification of other systemically important institutions (O-SIIs) and on imposing the O-SII buffer.
By implementing the Recommendation of the European Systemic Risk Board (ESRB) on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures, the Committee members acquainted themselves with the results of the monitoring of the Polish banking sector’s exposures to Luxembourg and concluded that there are reasons allowing not to reciprocate the instrument introduced.
The Committee also discussed how to implement the ESRB recommendation on identifying legal entities. Supporting the popularisation of the use of LEI1 codes, the Committee deems it advisable to gradually extend the scope of application of LEI codes by public administration bodies in the context of their supervisory duties or reporting data acquisition.
The Committee took note of the state of the European Commission’s work on the implementing regulation designating replacement rates for CHF LIBOR. The Committee came to a conclusion that the lack of designation of statutory replacement rates for these benchmarks by the European Commission would generate risk of significant disruptions in the functioning of the financial system. Institutions comprising the Committee expressed this position in the public consultation conducted by the Commission.
The next regular meeting of the Committee on macroprudential supervision is scheduled for December 2021.
1 Legal Entity Identifier (LEI) is a 20-character unique reference code whose purpose is to help identify legal entities participating in financial transactions. Only duly accredited organisations are authorised to issue LEI codes.