Senate to settle NIK-BFG dispute over Banking Guarantee Fund's status

The Senate will decide today whether the Supreme Board of Inspection (NIK) has the right to oversee the activities of the Banking Guarantee Fund (BFG). The status of the fund, which was created to bail out ailing banks and cover the financial obligations of bankrupt institutions, has recently become the center of attention, since under European Union regulations the BFG is not considered a "state legal entity" and as such does not come under the NIK's authority. This notion has sparked outrage among NIK officials who would no longer control state money amounting to zl 50 million now located in the fund. The NIK recently accused the fund of financial mismanagement when it was discovered that the fund had purchased a building for zl.77 million. BFG authorities however dismiss the accusations and say BFG is not a legal entity and does not fall under NIK' s authority. BFG is one of the largest financial institutions in the Polish banking system with assets totaling zl.3 billion. (Gazeta Wyborcza, p.22)