Polish banking sector remains stable and risk is limited, says FinMin
The situation of the Polish banking sector remains stable and the risk is limited, Poland's Deputy Finance and Economy Minister Jurand Drop reported pointed out during a meeting of the lower house of parliament, Sejm Public Finance Committee. The most significant weakness in the Polish financial system is the risk associated with the portfolio of foreign currency housing loans.
"The situation of the Polish banking sector remains stable, and the risk is limited. Banks operating on the domestic market are characterised by a high level of solvency, which has been facilitated by a systematic increase in own funds, which exceeded PLN 220 billion, partly due to an increase in high-quality capital, this is Tier 1. As a result, banks' own funds significantly exceeded capital requirements, which are based on a risk-based regime," said Drop.
As the Deputy Minister of Finance pointed out, domestic banks show a high capacity to absorb losses and provide financial services even in pessimistic stress test scenarios.
"To put it simply, even if unexpected events with a significant negative impact on the financial sector occur, our banking sector has all the tools it needs to deal with them and continue lending to the economy," Drop pointed out.
Drop also pointed out that the work of the Financial Stability Committee shows that the banking system is secure and that sources of risk are being monitored.
"The most significant weakness in the Polish financial system is the risk associated with the portfolio of foreign currency housing loans. Next in the hierarchy of weaknesses is geopolitical risk, the risk of WIBOR being undermined, and the risk of free credit sanctions," Drop added.
pat/ nl/