The Central Bank of Poland published its Financial Stability Report, concluding that Poland’s financial system remains stable and the banking sector is resilient to shocks, with systemic risk limited and traditional bank risks at a moderate or low level. Excess capital and high profits provide capacity to absorb losses and support lending expansion even in pessimistic stress test scenarios. The report identifies the key risks as structural, primarily linked to legal and regulatory risk, including continuing provisioning needs for the FX housing loan portfolio and emerging legal uncertainty for zloty-denominated loans. It also highlights a sustained reduction in bank financing of the real economy, alongside limited development of the non-banking sector, and recommends measures including reducing legal and regulatory risk, applying proportional consumer protection with differentiated sanctions, increasing lending (especially to enterprises), finalising Poland’s interest rate benchmark reform, continuing FX loan settlements, ensuring MREL-RCA is fully covered with eligible debt instruments, reviewing the Long-term Funding Ratio (WFD), strengthening interest rate risk management in cooperative banks, and addressing liquidity mismatch in open-ended investment funds, as well as targeted actions for the insurance sector on solvency assessment, annuities, customer value and disclosure of cover and claim payments.

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