Sejm enacts bank recapitalisation programme

2010-02-12



The Sejm on 12 February approved most Senate amendments to the government-sponsored bank recapitalisation scheme, intended to support the stability of the Polish banking system amid the downturn. They were largely technical in nature, and the bill was enacted with little changes to its original wording approved by the Sejm in early January.
The plan envisages state guarantees of up to 100% for capital increases in the form of preferred-share or subordinated-debt issues, undertaken by banks that are unable to raise funds from the market. This means that the government will be able to step in to buy the new shares or bonds. The programme is to be open to all banks and insurance companies based in Poland, regardless of their financial condition and ownership nationality, and will run until the end of 2010. The Ministry of Finance expects that its beneficial effects will extend beyond the financial sector itself, by protecting public confidence in the financial system.
In December the programme received an official go-ahead from the European Commission, which concluded that it was consistent with EU guidelines concerning state aid during the crisis, and constituted an adequate policy tool for dealing with potential economic disturbances.