Abstract
Even though the Polish cooperative banks were affected by the global crisis only indirectly, yet after the crisis their condition has begun to deteriorate. This was the result of numerous changes taking place within the macroeconomic and regulatory environment. This paper is to define the impact of crucial post-crisis regulations passed by the EU – CRDIV/CRR package, the directives on DGS and BRR – on the directions in which the organizational model of domestic cooperative banking should evolve.CRDIV/CRR is a regulatory package implementing the provisions of Basel III (Third Capital Agreement, Basel III). As part of the package, changes were made in two main areas determining banks’ security: the first one is capital adequacy, the second – liquidity and liquidity risk. Implementation of the provisions of the CRD IV/CRR package regarding banks' capital base policy into the Polish legal regime began in mid-2015 on the back of the act on macro-prudential supervision of the financial system and crisis management in the financial system dated 5 August 2015.Directive 2014/49/EU of the European Parliament and of the Council concerning Deposit Guarantee Schemes (DGS) essentially increases the protection of depositors' savings and one of its main provisions is harmonizing the methods of financing deposit-guarantee schemes ex ante. The Directive of the European Parliament and Council 2014/59/EU (BRRD) defines the principles of establishing national recovery and resolution mechanisms. The DGS and BRR Directives were introduced into the Polish legal regime by means of the act on the bank guarantee fund, deposit guarantee scheme and resolution of 10 June 2016.Based on an analysis of the impact of selected EU and national post-crisis regulations on the cooperative banking sector in Poland, two final conclusions were reached. First and foremost, in the hitherto existing regulatory environment imposing additional burdens on all banks, privileges were foreseen mainly for Institutional Protection Schemes (IPSs) members, while in the new legal regime the proportionality rule was applied to a limited extent. Secondly, due to the privileges arising from existing regulations, the evolution of the organizational model of Poland’s cooperative banking sector towards IPS seems to be inevitable.
Highlights
Introduction and formulation of the problemThe global financial crisis of 2008 – 2009 affected Polish cooperative banks in an indirect way
First and foremost, in the hitherto existing regulatory environment imposing additional burdens on all banks, privileges were foreseen mainly for Institutional Protection Schemes (IPSs) members, while in the new legal regime the proportionality rule was applied to a limited extent
It may be stipulated from the methodology established by the Commission that for cooperative banks, the amount of eligible liabilities should not exceed the sum of basic capital requirements; in some cases, it may be zero [14, Art. 2.2]
Summary
CBs’ receivables from non-financial entities and the local government sector (PLN bn). According to the adopted standards, the MREL amount should be calculated so that in case of restructuring, write down or conversion of eligible liabilities would allow restoring the institution's ability to meet the relevant capital requirements provided by the CRDIV/CRR package and market confidence, taking into account the business model, funding model and risk profile It may be stipulated from the methodology established by the Commission that for cooperative banks, the amount of eligible liabilities should not exceed the sum of basic capital requirements; in some cases, it may be zero (if the resolution authority finds that the liquidation of the institution under ordinary bankruptcy proceedings is feasible and credible and there are no additional reasons to determine the amount of a potential capital injection) [14, Art. 2.2]
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