Banks' new big brother

Although heavily criticized by financial institutions, experts and the EU, a bill revamping securities, pensions and banking supervisory systems was passed by parliament, and is now just waiting on the President's signature to become law.

Two weeks after it comes into force, the new Financial Supervision Commission (KNF) will take over the responsibilities of the Securities and Exchange Commission (KPWiG) and the insurer and pension regulator (KNUiFE). From January 1, 2008, it will also take over the role of the Commission for Banking Supervision (KNB).

The European Central Bank (ECB) has criticized the changes and pointed out that political nominations may endanger the operational independence of the authority.

The head of the KNF, as well as his or her two deputies, will be nominated by the Prime Minister. The Finance Minister, the Minister "responsible for social security," the President and the National Bank of Poland (NBP) will all choose one representative each for the commission.

"Reducing the role of the central bank to one place on the commission means subordinating it to the government," says Andrzej Wolski, general director of the Polish Bank Association (ZBP). According to Wolski, the new system - at best - might function as well as the old one, which was praised by many respected institutions. "We are risking insecurity and a fall in quality, and we will have to pay zł.150 million for this," he says. Until now, the Commission for Banking Supervision was financed by the National Bank of Poland, while the new system will be financed by banks themselves.

It is not yet known who will head the new super-regulator, but speculation suggests the job could go to former Deputy Finance Minister Cezary Mech.

Katarzyna Marcinkowska