Balcerowicz under fire
The Commision for Banking Supervision (KNB) yielded to government pressure and delayed by three weeks its decision on whether to approve the Pekao-BPH merger resulting from the takeover by Unicredito Italiano of the German lender HVB. Wojciech Kwaśniak, a member of the Polish bank regulator who earlier recommended that KNB should give the green light to the tie-up, decided to abstain from voting after the ruling conservatives announced he might have a conflict of interest, since Kwaśniak's wife works for a BPH subsidiary.
The fiercest attacks of the stabilization pact members however, were directed at the governor of central bank, Leszek Balcerowicz. Balcerowicz resisted attempts to use the KNB, which he chairs, to stop the deal, and a week earlier excluded deputy Finance Minister Cezary Mech from the watchdog's meeting with Alessandro Profumo, CEO of Unicredit.
As a result of his decision, the League of Polish Families (LPR) announced Balcerowicz should be placed before the State Tribunal and removed from office while Law and Justice (PiS) filed a motion for the establishment of an investigative commission to probe into the functioning of the central bank and KNB in the years 1989-2006.
"Exerting pressure and probing into the actions of the central bank undermines its independence," Balcerowicz said. "History shows there's a need for an institutional financial watchdog, and if such a watchdog has to back off in the face of shortsighted political pressures ... then what kind of independence is that?" he asked.
European Central Bank President Jean-Claude Trichet last week warned that governmental pressures on the central bank undermined Poland's reputation in the international arena and the European Commission, which has already approved the Unicredito-HVB merger, launched legal action against Poland for blocking it.
Still, Alessandro Profumo hasn't lost hope for a peaceful solution to the merger muddle. "I am convinced the bank regulator will act independently and we will be allowed to exercise [HVB's] voting rights in BPH," he said after a meeting with Prime Minister Marcinkiewicz on Friday. (Reuters)
