Tuesday , January 26 2021

Senators proposed amendments to the Supervision Act

Senators submitted several amendments to the Law on Strengthening Financial Supervision. The opposition filed an appeal for the rejection of the law and the removal of the article on the seizure of banks. The head of the budget and financial commission Grzegorz Biretsky (PiS) presented his amendments to protect cooperative banks.

The Senate discussed on Wednesday a law amending certain laws due to increased financial oversight. One of the PiS, adopted at the initiative of the PiS, as proposed in the second reading in the Seimas, suggests that if the bank’s own funds are reduced below the level required by the Banking Law, or the risk of such a reduction arises, Polish Financial Supervision Authority may decide to acquire a bank by another bank, the acquiring bank’s consent ”if it does not jeopardize the safety of the funds accumulated in the accounts of the acquiring bank or creates such a risk, reducing the own funds of the acquiring bank below legal level required by law. The PFSA decision "may contain the terms and conditions for accepting a bank by another bank."

Opposition deputies claimed that the amendment was made to the Banking Law two days after the owner, among others, Getin Noble Bank Leszek Charnetsky informed the prosecutor's office about the suspicion of committing a crime Marek Chzhanovsky as head of the CNF. According to a recent publication Gazeta Wyborcza, according to Charnetsky, in a conversation in March 2018, Zhanovsky had to offer his bank in exchange for about 40 million zlotys.

The speaker of this act, Grzegorz Biretsky (PiS), argued that the Senate should not suspend work on this act, as demanded by the opposition. In his opinion, there is no corrupt sentence in the transcript of the recorded conversation between Charnetsky and Chzhanovsky. “She spoke about the plenipotentiary of Mr. Charneca,” he said.

He added that the proposal to suspend work on the bill in exchange for a bribe is also “interpreted” from this content. “Therefore, stopping work is the realization of this corrupt proposal,” he said.

“We are working on a law that is necessary for the sustainability of public finances,” stressed Biretsky, adding that this may be unfavorable for some investors in the financial market in Poland, possibly unfavorable for Mr. Leszek Charnetski, who is not the result of a transcript “But, as he said, this is not a reason to stop working on this act.

Responding to questions from the senator, he argued that in everything “it gives too easily faith to people who used lies in the past.” He noted that “we are dealing with a statement from a person who ran a banking company that is of interest and concern for the Polish Financial Supervision Authority”.

Bierecki added that on the day of publication of the record one of the banks Leszek Czarnecki (Idea Bank – PAP) was included in the list of public warnings of the Polish Financial Supervision Authority. "This is the first bank in this list, until now there were companies that were financial pyramids," – said the senator PIS.

He argued that one should not admit too much to transmit offers, because things may not look the way they are presented by one side.

He noted that he has reason to disbelieve what is in this decoding of the recording of Zhanovsky with Charnetsky. According to Biretsky Leszek Charnetsky, “it is possible that this is about the possibility of using international arbitration”. The senator noted that Charnetsky recapitalized his banks for 200 million zlotys from March to October, following the recommendations of the Polish Financial Supervision Authority, but he did this through his company registered in the Netherlands. He recalled that in accordance with the legislation of the Netherlands between Evreka and the State Treasury, associated with the privatization of ROM, there was a dispute years before the arbitral tribunal.

According to Birechka, the recapitalization process can be an explanation for the delay between the interview and the notification of the prosecutor and the publication of the conversation between Leszek Charnetsky and Marek Chzhanovsky. “Perhaps many people play a certain role in a prepared theater,” said Biretsky.

The rapporteur was asked a question about constitutional doubts regarding the amendment adopted by the Seimas in the Senate legislature. Slawomir Rybitsky (PO) was noted in this regard; it is not better to delete this article, especially since it is also on the BGF bill in the Sejm.

“The responsibility for unconstitutionality does not concern the content of this provision, but the legislative procedure,” answered Biritsky. “This procedure is assessed by the Seimas authorities, the commission assessed the essential content of the provisions, and there was no request to exclude this provision, but only to reject this law,” he explained. However, the Law on BFG, he added, is not being considered at the current meeting of the Sejm.

Deputy Finance Minister Leszek Skiba also answered questions. He argued that an amendment to mergers or mergers of banks was necessary, since at the end of December the transition period of the EU Directive CRE ends, which assumes that banks that do not meet capital requirements and do not join, lose their license and can fail. Since autumn, it is better to continue working in a different formula, he argued, adding that the collapse of a bank always causes social problems and undermines confidence in the banking system.

Skiba stressed that the threat of losing a license concerns several small cooperative banks, the “scale is absolutely minimal,” but “it is better to have such provisions.” According to him, such provisions entered into force until 2016, they were replaced by a permit procedure (the so-called forced restructuring). “It turned out that both are necessary, hence the idea of ​​restoring the old rules,” he added. The Deputy Minister stressed that the proposed provisions are identical to those that were until 2016, and were presented as a parliamentary initiative, when it was realized that the problem of losing a license is real.

In the framework of the discussion, Biretsky announced that he would propose an amendment that would additionally protect cooperative banks that are not covered by the association. Because in the act "appears as a prerequisite for the expropriation of (the bank) the lack of membership in the association." “The amendment is to exclude the merger condition of the bank (with another) with the fact that it did not participate in the association,” said Biretsky.

“I represent him so that we can again discuss the problem at a committee meeting,” he added. He stressed that the pretext for the amendment was the “epic of the Polish bank Apex” (banking banking banks, which, unlike the two other cooperative associations SGB and BPS, are not covered by the so-called institutional protection system IPS, imposing specific requirements – PAP). Bierecki does not exclude that discussions in the committee will be closed to the public. If his doubts are resolved, he adds, cancels the amendment.

The opposition also introduced its amendments. Deputy Speaker of the Senate Bogdan Borusevich (PO) said that he hopes that the government will move away from the most criticized provisions of the law, that is, an amendment that allows banks to take over. “I thought it was a reasonable way out of this situation,” he argued.

This did not happen, he added, and "it undermines the credibility of the financial regulator." The act in question allows the “expropriation” of banks, which, according to Borusevich, will pass “without any rules”. According to the Deputy Speaker of the Senate, this is part of the tendency of the current government to “nationalize” everything. The Deputy Speaker submitted a proposal to exclude the article under consideration.

Leszek Charnobay (PO) said that the debate on Wednesday showed "how the law is being done in Poland." “I knew it was bad, but I didn’t know it,” he stressed. According to Chernobyl, "the world will not collapse, we will amend the Smolinsky amendment (regarding the seizure of banks – PPA) in the normal mode." However, if the law is passed without any changes, there is a danger that “Vladek and Jurek will gather at the KNF, they recognize that they need to take the zloty for the zloty, and they will do it”. He proposed to completely reject the bill and, if not, reject the amendment on the adoption of banks.

In turn, Senator Alexander Bobko (PiS) noted that there are even EU directives, according to which, if a bank is on the verge of bankruptcy, it can be “expropriated” in the public interest. This, he said, is about the most controversial article of this law.

Senator Krzysztof Moruc (Law and Justice) argued that the law was “to save the system and investors at the expense of the owners”. “We need to implement solutions that will allow banks that are facing bankruptcy to take over other banks,” he said.

He noted that the mechanism for the adoption of banks in the act existed in the legal system in 1997-2016. None of the entities of these provisions, he added, did not question the beginning of the conversation between Leszek Charnetsky and Marek Jhanovsky until the outbreak.

“It doesn't seem like you can take such a zloty bank,” said Mr. Frost. “You can only take on banks that face bankruptcy, which is not enough, and they will be transferred to other banks,” he added.

In his opinion, the opposition senators know this well, but they are talking about capturing the zloty, "because it sells well in the media."

The proposed amendments should be adopted by the Senate Committee. Voting on the account – perhaps on Friday.

The Law on Amendments to Certain Legislation in Connection with the Strengthening of Supervision and Protection of Investors in the Financial Market, in accordance with the rationale, is aimed at “strengthening the coordination of state policy regarding the financial market and earlier identifying threats related to its operation”. There are changes in the Law on the composition of the Financial Supervision Authority and the organization serving the office commission, which involves the creation of a Financial Education Fund and bonds.

The act assumes that the composition of the Commission will be expanded to include a representative of the Prime Minister, the minister-coordinator of special services, as well as the presidents of UOKiK and BFG.

In accordance with this law, the KNF Chancellery will become a state legal entity. The method of financing PFSA and PFSA Office will also be changed, thanks to which the committee will be able to more effectively manage its funds. The KNF and PFSA offices will be funded directly from fees paid by controlled financial market entities, and not so far from contributions, but through the state budget (PAP)

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