11 Aug 2015
New publication: An assessment of direct and indirect liabilities of Polish banks AD 2015
The publication is an attempt at a comprehensive analysis of direct and indirect burdens imposed upon banks in 2015. The idea to present such factors — which are often extremely varied in nature — in a single study was born out of the fact that these factors are often considered separately, on the basis of various criteria which causes them to be split into different groups.
The main intention of the authors has been to draw attention to the need for a comprehensive assessment of the impact of regulations adopted. The first step in this direction has been what they have termed the stock-taking of the changing factors having a significant impact on the functioning of the banks and affecting their financial results. As these factors are not uniform in nature, the authors have chosen to divide them into several groups. Their assumption has been to separate those which usher in — or compel — changes in at least one important area: the balance, the business model or operating model or the propensity for change.
Having conducted a careful and in-depth analysis of the regulations in question, the authors presented the following conclusions and recommendations:
1. Various factors which are unique to the banking industry and have an impact on the functioning thereof have been collected as a result of the present analysis.
2. An attempt at the compartmentalization and measurement thereof demonstrates that the consequences for various aspects of the business are significant and force the management boards of banks to implement profound changes to their strategy.
3. The resulting picture should also serve as a warning sign for politicians insofar as the need to maintain the functionality of this sector is concerned.
4. Another conclusion is that there is an increasingly apparent asymmetry in terms of the burdens imposed compared to other sectors of the economy.
5. For regulators, who often act in isolation, this document should serve as a record of excessive actions which are both intensive and often uncoordinated, both on the level of individual units and on the inter-ministerial level, resulting in an over abundance of banking regulations in specific segments.
6. For supervisory authorities, this analysis may serve as a demonstration of the scale and difficulties involved in ensuring a safe control of the sector without unduly restricting its economic freedom.
7. The most general consequence is that banks become less attractive to investors. This, in turn, means a disruption of one of the most significant sectors of the great “ecosystem” that is the national economy.
According to the authors, if the present trends are allowed to prevail, with the role of the banks for the economy in both Poland and Europe remaining at the present level (approximately 80% of corporate financing comes from the banking sector), it may ultimately lead to banks being taken over by state capital.
To find out more about the banking union, please download the publication with a paper by Mieczysław Groszek and Marek Radzikowski, which was presented during the 138th mBank-CASE Seminar: “An assessment of direct and indirect liabilities of Polish banks AD 2015”, which took place on 28 May 2015. (WATCH THE SEMINAR ONLINE).
* mBank–CASE Seminar Proceedings are continuation of PBR–CASE and, since 1998, BRE Bank–CASE Seminar Proceedings Series.
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