FINANCIAL MARKET SUPERVISION AUTHORITY (KNF) – the aim is to ensure regular operation of this market, its stability, security and transparency, confidence in the financial market as well as to ensure that the interest of market actors are protected.
The KNF supervises the financial services industry in Poland. This includes credit institutions, insurance firms, investment companies, exchanges, pension scheme as well as payment institutions and credit unions.
The task includes the following:
Undertaking measures aimed at ensuring regular operation of the financial market
Undertaking measures aimed at development of financial market and its competitiveness;
Undertaking educational and informational measures related to financial market operation
Participation in the drafting of legal acts related to financial market supervision
Creation the opportunities for amicable and conciliatory settlement of disputes which may arise between financial market actors, in particular disputes resulting from contractual relations between entities covered by PFSA supervision and recipients of services provided by those entities;
Carrying out other activities provided for by acts of law
BANKING SUPERVISION AUTHORITY TASKS
Licensing and authorization
Regulatory and prudential
Monitoring and inspection
Discipline
The objective of the supervision is to ensure: (Banking Act, Art 133)
The safety of funds held on bank accounts
Compliance by the banks with the provisions of the present Act, the Act of the National Bank of Poland, their articles of association, and the decision on granting authorization to establish those banks
Compliance of banks’ activity carried out accordance with art. 70 para. 2 of the Act on Trading in Financial instruments of July 29, 2005, with provisions of that Act.
The measures taken in the exercise of banking supervision shall involve:
Assessment of the banks’ financial standing, including reviewing the solvency, quality of assets, payment liquidity and financial results
Reviewing the quality of bank management system, in particular the risk management and internal control systems
Reviewing loans, cash advances, letters of credit, bank guarantees and sureties, as well as issued bank securities for compliance with the regulations in force in these respects,
Reviewing the security taken against loans and cash advances and timeliness of repayment
Reviewing compliance with the limits referred to in Article 71 and 79a and assessment of the process of identifying, monitoring and control of concentration exposures, including large exposures
Reviewing the bank adherence to the standards of permissible risks in banking activity, specified by the Polish Financial Supervision Authority, the management of risk related to the conducted banking activity, including the adjustment of the risk identification and monitoring process, as well as risk reporting to the type and extended of activities conducts by the bank
Assessment of estimating, maintaining and reviewing the internal capital
The Bank Guarantee Fund’s mission is to contribute to the safety and stability of banks and cooperative savings and credit unions and to increase confidence in the banking system.
BFG, the Fund – with its head office in Warsaw is a legal person established by the act on the bank guarantee fund of 14 December 1994 (consolidated text, Journal of Laws of 1009 NO. 84, item 711 as amended) which has been in force since 17 February 1995.
TASKS
To reimburse up to the amount stipulated in the Act on the BFG, deposits held in bank accounts in the event of fulfilment of the guarantee condition with respect to a bank that is a member of the deposit guarantee scheme,
As of 29 November 2013, to reimburse up to the amount stipulated in the Act of BFG, deposits held in cooperative savings and credit unions in the event of fulfilment of the guarantee condition with respect to a credit union
To provide financial assistance to banks facing the threat of insolvency or for the acquisition of stock or shared of another bank
To provide financial assistance to cooperative savings and credit unions facing the threat of insolvency and to support restructuring process with respect to these credit unions
To extend a guarantee to increase the own funds of a bank to banks undergoing reorganization and in case of execution of said guarantee to purchase or assume stock, bonds or bank issued securities
To collect and analyze information about entities covered by the guarantee scheme, including the carrying out of analyses and forecast concerning the banking sector and the cooperative savings and credit union sector
Bank deposits in PLN and foreign currencies held in the name of the following are covered:
Natural persons
Legal persons, including local government units
Organisationsl units without separate legal personalit, but possessing legal capacity
School savings associations and employee assistance-and-loan associations
Bank deposits in PLN and foreign currencies held in the name of the following are NOT covered:
The State Treasury
Financial institutions such as banks, investment firms, brokerage houses, pension funds, investment funds, entities providing insurance srvices, cooperative savings and credit unions (deposits made by there instutitions);
Bank managers and major shareholders of a bank
Guaranteed Deposit Protection Funs
0.55% of the total funds collected in the bank for all accounts as the basis for calculating the amount of the reserve requirement
Assistance fund
0.1% of 12.5 times the sum of the capital requirements for particular types of risk and capital requirements for exceeding limits and violation of other standards laid down in the Banking Act.
Banking product vs banking service
Banking services:
ACTIVE: rely on the placement of accumulated funds in various beneficial projects, mainly loans; carried out by the banks on their own account and risk
PASSIVE: rely on the activities aimed at extending the sum of funds at the disposal of the bank; carried out by the banks on their own account and risk
INTERMEDIARY: include monetary settlement arising from customer payment orders, purchase securities on behalf of a client, etc; banks carry them on behalf of the account and risk of the customer
OTHER: provision of non-banking operations, such as renting safe deposit boxes,etc
Retail banking products and services: loans, deposits, accounts&transfers, others
LOAN: making by the bank (lender) available to the borrower a certain amount of cash for fixed period to be used for a specific purpouse. The borrower agrees to use the loan under the terms of the agreement, fund the whole amount, together with interest within a specified period and the payment of commissions on the loan. A secured loan is a loan in which the borrower pledges some asset as collateral. Personal: promissory note, bill of exchange, attorney. Property: general pledge, blockage of funds in the accounts, mortgage.