Republic of Poland: Financial Sector Assessment Program-Technical Note-Cooperative Banks and Credit Unions

IMF Staff Country Reports, June 3, 2019

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Republic of Poland: Financial Sector Assessment Program-Technical Note-Cooperative Banks and Credit Unions

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Bibliographic details

• Published: June 3, 2019
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781498318099.002

Overview

• This Technical Note reviews the cooperative bank and credit union sectors in the Republic of Poland.
• Focus areas:
  • The situation of the two sectors that are both in states of transition.
  • The regulatory and supervisory arrangements.
  • The safety net and resolution regime within the context of the crisis management framework.
  • Perspectives on the sustainability of institutional models and the sectors within a modernizing and competitive banking sector.
• High-level assessment:
  • Most cooperative banks and credit unions are found to be stable; however, each sector has its own issues.
  • The Financial Sector Assessment Program is broadly supportive of the policy direction for cooperatives, while it questions whether the credit union sector should remain standalone.
  • The two existing Institutional Protection Schemes and their affiliating banks need to be strengthened to ensure sustainability.
  • Policymakers are advised to decide whether a standalone credit union sector remains appropriate and, if not, define a strategy to transition viable credit unions to become or consolidate with banks.

Key findings

• Stability assessment:
  • Most cooperative banks and credit unions are found to be stable.
  • Each sector has its own issues (unspecified in the summary).
• Institutional Protection Schemes:
  • Two existing Institutional Protection Schemes and their affiliating banks require strengthening to ensure sustainability.
• Credit union sector viability:
  • The IMF questions whether the credit union sector should remain standalone.
  • Recommendation that policymakers decide on the standalone appropriateness of the credit union sector and, if not appropriate, define a transition strategy for viable credit unions to become or consolidate with banks.

Regulatory and supervisory arrangements

• The Technical Note reviews the regulatory and supervisory arrangements for cooperative banks and credit unions (specific arrangements and details are part of the full note; summary emphasizes this as a key focus area).

Safety net, resolution regime, and crisis management

• The Technical Note examines the safety net and resolution regime within the context of the crisis management framework for the cooperative bank and credit union sectors.
• Emphasis on ensuring sustainability of institutional protection mechanisms and affiliating banks as part of crisis preparedness.

Policy recommendations and strategic advice

• Broad policy stance:
  • Supportive of the current policy direction for cooperatives overall.
• Specific recommendations:
  • Decide whether a standalone credit union sector remains appropriate.
  • If the standalone model is not appropriate, define a strategy to transition viable credit unions to become or consolidate with banks.
  • Strengthen the two existing Institutional Protection Schemes and their affiliating banks to ensure sustainability.

Content in this bundle

• 1polea2019007 - Executive Summary
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  • 1polea2019007 - Executive Summary (PDF)