Macro-Prudential Regulation of Credit Booms and Busts : The Case of Poland
The last several years before the global downturn of 2008-2009 saw rapid credit growth in Poland. The credit-to-gross domestic product ratio rose from about 25 percent in 2004 to close to 50 percent in 2009. Such an expansion itself might potential...
| Main Authors: | , |
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| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111005135349 http://hdl.handle.net/10986/3596 |
| Summary: | The last several years before the global
downturn of 2008-2009 saw rapid credit growth in Poland. The
credit-to-gross domestic product ratio rose from about 25
percent in 2004 to close to 50 percent in 2009. Such an
expansion itself might potentially be a source of risks to
financial stability, but it was also coupled with relatively
new phenomena, such as massive foreign currency lending.
Thanks to the pro-active attitude of the Polish authorities
and sound economic fundamentals, the risks largely have not
materialized. Since 2006 the financial supervisor has
addressed in its recommendations for banks the problem of
foreign exchange lending, which contributed to the high
quality of the portfolio. Before the economy slowed down,
the Polish Financial Supervisory Authority persuaded banks
to accumulate an additional capital buffer that helped
protect them from the negative consequences of the downturn.
Some regulatory concepts that had been put into place in
Poland in the previous years, including quantitative
liquidity requirements, are now being implemented globally.
The Polish Financial Supervisory Authority participates in
international debates on a new regulatory regime for the
financial system. The major message the authority intends to
convey is that all new regulations must be tailored
carefully. Regulators should make an effort to ensure that
the benefits of enhanced quality of the capital base or the
countercyclical buffer are not compromised by international
overregulation that could undermine national
authorities' ability to pursue effective
country-specific policies. |
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