And then there was one

The government revived its plan to take the Commission for Banking Supervision away from the central bank by merging it with the Securities Commission (KPWiG), and insurer and pension regulator KNUiFE. "We will get rid of three financial supervisors and consolidate them into one effective institution. Those markets are interrelated so there is no sense in having three separate supervisory bodies. One will be much more efficient," Prime Minister Kazimierz Marcinkiewicz said.

The new body will have an extensive remit and without its consent no bank or fund will be able to merge with another similar institution. Moreover, the head of the regulator will have the right to act as prosecutor in bank-related proceedings.

In the new seven-member Financial Supervision Commission, three members will be appointed by the Prime Minister, two will be his Ministers, while the central bank and the President will have one representative each.

The project raised doubts in the National Bank of Poland and the European Central Bank, which pointed to the fact that such a strong regulator could threaten the stability of the banking sector.

"The implementation of this draft creates a significant threat in a key area [of the economy], where Poland had found a good arrangement," central bank head Leszek Balcerowicz wrote in a letter to Marcinkiewicz. (Reuters)