Although the economic crisis has largely ended, European banks have not yet regained their balance, and their biggest problem is a lack of profitability. Although their capital strength has ceased to be an issue, lending will remain stagnant for a some years and companies need an integrated and effective single capital market, says Jan Schildbach, Head of the Banking, Financial Markets and Regulation team at Deutsche Bank Research.
It is fair to say that the euro crisis was a game-changer in our thinking about the viability of currency unions in general and euro accession in particular. I will try to be brief and get right to the point. I would like to share with you some thoughts on what the euro crisis and its legacy implies for non-euro EU countries, such as Poland.
We have recently witnessed a very interesting situation in the sector of investment fund management companies (TFIs). Investment funds’ assets have increased considerably, which means sales of participation units have markedly gone up. Despite such favourable economic conditions profits posted by TFIs have fallen. What lies behind this situation?
The role of banks in the financing of the Union's real economy and financial intermediation remains high, but the capital market will become relatively more important. Further reforms should accompany this transformation and improve the tools of the capital market, especially for SME sector - says Mario Nava from the European Commission.
The European Central Bank counteracts country-specific risk premia in eurozone, that hinders proper allocation of capital and incurs the risk of building up a new credit bubble. Meanwhile the eurozone is already waiting to cover huge write-off losses – said professor Hans Werner Sinn, president of Ifo Institute in Munich. Therefore, in the Polish debate about the entry into the eurozone he suggests – wait and see.
The Banking Union can be effective and give the potential to break the vicious cycle of fiscal and financial instability only if at the same time all necessary components are in place – a Single Rule Book, a Single Supervisory Mechanism, a Single Resolution Mechanism and financing arrangements. Quick entry to the Union would be beneficial for Poland – told Bernhard Speyer, former Managing Director at Deutsche Bank Research.
Changes in the pension system are neutral for Poland’s present rating but may limit upward mobility of Poland’s rating from the current A2 level. Such a degree of reform reversal would not be likely in countries with the highest rating, says Jaime Reusche, an analyst in the group of sovereign credit risk at Moody’s Investors Service.
Approximately 10 million non-cash transactions are carried out daily in Poland and more than half of them are conducted without the use of payment cards. They are performed with the participation of banks via the National Clearing House (pol. Krajowa Izba Rozliczeniowa — KIR). This unvarying picture may soon be subject to a radical change. The market for payment settlements has just been opened to non-bank entities that have been waiting for such an opportunity for a long time.
Macroprudential supervision is the copestone of the global financial safety that has emerged as a lesson learned from the crisis. Institutions responsible for carrying out macroprudential supervision have been established in many countries. Generally, this role is performed by central banks. Poland lags behind but the National Bank of Poland has developed a legislative proposal that would provide grounds for establishing macroprudential supervision in our country, too.
Anti-crisis regulations of the banking sector have a dark side. Bankers claim they can slow down growth due to reduced lending as well as force banks to transfer business from one country to another. And what will Poland do with regard to the proposed solutions? 'It will act in a cautious manner', said Marek Belka, governor of the National Bank of Poland at the Banking Forum.