EU keeps a close eye on KNF

The new Commission for Financial Supervision (KNF) has attracted the attention of Europe, and Brussels says it won't hesitate to act if it gets to big for its boots.

"Supervisors must be independent from political interference. There can be no trust, no confidence in the market if financial supervisors have to follow orders from political masters," said Charlie McCreevy, the EU Commissioner for the Internal Market and Services, while in Warsaw last week. "As for the EU Commission, if we see there's political interference in organizing [KNF], we'll take the necessary actions against Poland." The new financial supervision body is due to start its operations on September 19.

KNF will replace the Commission for Banking Supervision (KNB), presided over by Leszek Balcerowicz, the Polish Securities and Exchange Commission (KPWiG), as well as the Insurance and Pension Funds Supervisory Commission (KNUiFE). KNF will officially takes over its full duties in January 2007.

During his visit to Warsaw, McCreevy also mentioned that in spite of the Polish government's compromise with Unicredit over the merger between Pekao and BPH, there are still legal procedures pending against Poland for breaching the EU's internal-market regulations.

Recent attempts by member states, such as Italy and Poland, to block cross-border mergers have pushed the EU Commissioner to propose a new directive limiting the reasons for which national authorities could block cross-border tie-ups. "We found after deliberations that the criteria were not tight enough," McCreevy said.