The WSE CEO: Growing stock exchanges are closely examining what the Warsaw Stock Exchange has to offer.

The WSE CEO was a guest at a conference organized by the IFC (International Finance Corporation), part of the World Bank Group, the largest global development institution focusing on the private sector in developing countries. Piotr Nowak/PAP

Investors and financial analysts interested in the background and factors contributing to the success of the Polish capital market questioned Marek Dietl, the CEO of the Warsaw Stock Exchange, who is presently visiting the United States. The WSE, which was completely rebuilt in 1991, currently generates more than half of the trading volume in Central and Eastern Europe.

Despite having the same founding year (1817), the Warsaw and New York stock markets' outcomes were very different for obvious reasons. It is primarily about historical circumstances rather than just the differences between Poland's and the United States' economic potential. Our nation has been denied the opportunity to pursue a self-determined economic policy as a result of two world wars and decades of communism. Poland was on the verge of going bankrupt when the Warsaw Stock Exchange opened its doors for business on April 16, 1991, and its chances of joining NATO or the European Communities were at best hazy.

Meanwhile, the Polish capital market took about 27 years to achieve a status similar to that of Israel or South Korea, although these countries have been building their potential for over half a century. Currently, the Warsaw Stock Exchange is the undisputed leader in the region—twice the size of Vienna, four times the size of Athens, and even eight times the size of Prague or Bucharest.” — Dr Marek Dietl explained.

The WSE CEO was a guest at a conference organized by the IFC (International Finance Corporation), part of the World Bank Group, the largest global development institution focusing on the private sector in developing countries. The starting point for the discussion on the sources of Polish success was a book entitled “Understanding The Polish Capital Market”, co-authored by Marek Dietl.

“This is a must-read for all capital markets representatives around the world who are looking for best practices to follow. The Polish experience is universal. It indicates what factors should be taken into account to organize an efficient and profitable exchange trading system” – noted Anderson Caputo Silva, the main specialist for the financial sector at the World Bank, moderating the debate.

Today, the paths of the New York Stock Exchange and the Warsaw Stock Exchange are once again intersecting. While the former is the main reference point for the world's most powerful trading floors, the WSE is the orientation of emerging or developing trading floors, and not only from our part of Europe.

“We have matured to be active outside our country. Hence, on the one hand, there's close cooperation with other trading floors of the Three Seas Initiative, and on the other hand, there's support for other capital markets.” — Marek Dietl stressed, referring to last year's purchase by the WSE of a majority stake in the Armenian Stock Exchange (AMX).

When asked about the basic conditions necessary to create an effective capital market, the WSE CEO mentioned: a friendly and well-functioning legal ecosystem, entrepreneurship and work culture, as well as the appropriate demographic and economic potential of a given country. While Poland was lucky to have all three of these arguments, according to Marek Dietl, success is also possible if at least two of them are fulfilled.

“We were prompted to invest in the Armenian Stock Exchange by positive changes in its legislation and the determination of local companies. However, the functioning of the capital market is based primarily on trust, which is very difficult to regain—so the current challenge for us is to build consistently and hastily the credibility of AMX in the eyes of potential investors.” — explained the WSE CEO.

Marek Dietl claimed that the Warsaw Stock Exchange is not sitting on its laurels. It confronts numerous obstacles in the years to come, such as incorporating ESG principles into business operations and altering the balance of industries represented on the Main Market.

“We want to be even more open to companies focused on innovation, operating in sectors such as blockchain or new technologies. In the future, up to 30% of companies listed on our market will represent the so-called >>New Business<< – said the WSE CEO.

The amazing global growth of NewConnect, one of the top three alternative marketplaces in the world today, piqued the interest of conference attendees. Within fifteen years, it developed a brand that investors could identify and value, in addition to serving as a sort of entryway for businesses getting ready to launch on the Warsaw Stock Exchange's main floor.

“The history of the Warsaw alternative market is a collection of amazing stories about the dynamic development of innovative companies that achieve success not only in the country but also abroad,” the WSE CEO explained.