Polish financial system is stable, risks are moderate - central bank
The National Bank of Poland (NBP) wrote in a December 2019 Financial Stability Report that the Polish financial system was stable while the systemic risk remained at a moderate level.
According to the NBP, the credit growth rate and indebtedness level in relation to GDP remain moderate while the structure of the banks' financing is secure.
"The Polish banking system remains resilient to shocks due to accumulated capital and low leverage," NBP reported, adding that the majority of banks met capital requirements.
The report admitted that some credit institutions were in a difficult situation and that this could have a negative impact on other banks. In this context, the central bank pointed to the cooperative banking sector, which, in the NBP's opinion, should start consolidating.
The NBP added that the risk has also been connected with the uncertainty regarding the scale of court rulings concerning foreign currency mortgage loans, following, among other things, the judgement of the EU Court of Justice.
According to the central bank, another risk to the stability of the financial system has been created by "the relatively high growth rate and the portfolio of unsecured high-value loans with long maturities."
The authors of the report underlined that banks should be conducting cautious credit policies and constantly monitor the situation.