The Polish Bank Insolvency Regime : Issues and Assumption Paper for the Design of an Upgraded Bank Resolution Framework
The bank insolvency framework in Poland should be modernized to ensure financial stability, maintain the continuity of critical functions in the banking system, and protect depositors and creditors, while assigning losses according to a pre-establi...
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/807961468333885401/The-Polish-Bank-insolvency-regime-issues-and-assumptions-paper-for-the-design-of-an-upgraded-bank-resolution-framework http://hdl.handle.net/10986/26838 |
| Summary: | The bank insolvency framework in Poland
should be modernized to ensure financial stability, maintain
the continuity of critical functions in the banking system,
and protect depositors and creditors, while assigning losses
according to a pre-established creditor hierarchy. Several
country experiences in Europe and elsewhere have
demonstrated the effectiveness of new bank resolution
measures by the European commission. A key aspect of the
resolution process is for the authorities to swiftly assess
and revalue the balance sheet of the intervened bank. Other
particularities of modern resolution procedures relate to
maintaining the integrity of secured financial contracts to
prevent disruptions in financial market transactions
including in payments and settlements systems. The treatment
of systemically important institutions should rely on
extraordinary resolution tools which are necessary if a bank
is too large to be purchased or for its liabilities to be
readily assumed. The purpose of this paper is thus to
describe and recommend new features that can be added to
strengthen the Polish legislation for handling commercial
bank insolvencies. The paper focuses on the legal issues
related to insolvency of banks (including commercial banks
and cooperative banks). The banking sector's share in
the total assets of the credit sector amounts to 89 percent
while cooperative banks control 6 percent. The only
wholly-owned state bank is the development bank Bank
Gospodarstwa Krajowego (BGK) which is subject to supervision
by the Polish Financial Supervisory Authority (KNF). |
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