The PFSA office disclosed a letter from Marek Chrzanowski, explaining why it is urgent to refer the legislative path to amending the draft law on the Commission (on amendments and supplements to certain acts related to strengthening the supervision of the financial market). The KNF office sent a Polish news agency Sunday.
Former head of the KNF In October, Marek Chrzanowski wrote to the Ministry of Finance that the combination of banks in the current market and the legal situation is the only way to avoid bankruptcy in the banking sector of the cooperative.
Chrzanowski alleges in a letter that it is necessary to change the provisions that the PFSA could force the banks to merge with the consent of the recipient.
Amendment related to the acquisition of banks
For the KNF project, the modification proposed by the PiS Club in the second reading was introduced an article that allows banks to take over other troubled banks. The law, together with this amendment, was adopted on November 9th and is currently being considered by the Senate.
According to the opposition, this article refers to charges of corruption, which was proposed by Leszek Czarnecki to the former head of KNF Marek Chrzanowski regarding their recording and publication of Gazeta Viborcza in March 2018.
In a letter dated 26 October 2018 provided by the KNF, Chrzanowski writes: "The current legal provisions do not contain a sufficiently broad spectrum of supervisory measures (…) that would allow effective preferential measures to counter the aggravation of the situation of the bank." The letter states that it is mainly about cooperative banks, in the case where association agreements expire soon.
Chrzanovski adds that this problem applies to banks, especially with funds below 5 million euros, "who do not have the opportunity to get involved in institutional protection systems, which prevents the application of mechanisms to support their liquidity and solvency". He also points out that "linking banks with a stronger bank, regardless of the legal formula, is in the current situation on the market, and the legal environment is practically the only way to remedy and avoid bankruptcy in the cooperative banking sector."
The head of the KNF emphasizes that it will accelerate the initiative and adopt regulations this year this will contribute to the preservation of the stability of the banking sector of the cooperative.
Deputy Minister of Finance on Amendments to the Law
Similarly, the significance of this amendment was explained during the meeting of the budget and the Senate Finance Commission on November 16, Deputy Finance Minister Piotr Novak. He then explained that the provisions analogous to those introduced by the amendment had been in effect between 1997 and 2016. The years have been abolished as a result of the implementation of the EU BRR Directive. The directive should have been universal for all banks.
"It turned out that due to the situation on the market, especially on the market of cooperative banks, it is justified to renew the existing existing provisions that would complement the existing catalog of the restructuring instrument," Novak assured. Currently, he added, he added, a limited set of "early intervention instruments before the start of the forced restructuring process".
The Deputy Finance Minister also said that a false narrative appeared on the issue of "what might be the result of a misunderstanding". In fact, he added, the provisions contained in the amendments were known for a long time and were consulted. None of them were listed.
"Without this provision, it may be necessary to liquidate these entities, so you will simply download them, which is better for society," stressed Deputy Minister of Finance. Therefore, the amendment, he added, was moved to the law on strengthening control.
"We can not afford to postpone the necessary solutions just because the two gentlemen talked," said Novak.
Chairman of the Bank's Guarantee Fund, Zdzisłav Sokal, who participated in a commission meeting (November 16th), pointed out that the decision on acquiring banks contained in the Law on Strengthening Supervision was true in the case of credit unions. He added that his use is recommended, for example, By the World Bank.
"This solution is used in the process of restructuring SKOK and it is very well assessed in the context of smaller banks," said BFG President.