Industry fears financial super-regulator

A bill being drafted by the government would merge the Securities and Exchange Commission (KPWiG) with pension and insurance regulator KNUiFE, creating an entity to be called the Office of Financial Supervision (UNF). The bill calls for the new institution to be created this year. According to government plans, the Commission for Banking Supervision (KNB) would also become part of the new super regulator in 2008. Deputy Finance Minister Cezary Mech, who is the driving force behind the bill, is tipped to head the regulator.

The idea has attracted widespread criticism from the financial sector to which it has been presented for evaluation.

"For a long time after the regulators are liquidated, we won't see any reduction in bureaucracy - what we'll see is chaos," said Zbigniew Mrowiec, a partner in the local office of law firm Dewey Ballantine and former deputy head of KPWiG.

He fears that the bill would eliminate the current bodies, rather than merge them, and create a new one in their place, with no established procedures.

Unified financial regulators are nothing unusual in Western Europe, as they operate in about 10 European countries, including Britain and Germany. However, experts fear that the UNF's powers will be too great, and they doubt whether it can remain independent of political pressures. 

"[In] Poland there's the question of political influence, and whether the guarantees of objective rulings and transparency will be met," said Jarosław Dąbrowski, head of Nord/LB's Polish unit. Dewey Ballantine's Mrowiec also doubted whether it is reasonable to put all the power in the hands of a single individual, rather than in the committees that manage current watchdogs.

"This idea ... is an attempt to politicise regulation, which could lead to the loss of trust that the current institutions have built up over the years," said Mariusz Sadłocha, head of brokerage at BZ WBK. (Reuters)