Polish Financial Supervision Commission chair sets out covered bond market development work and the case for a Long Term Funding Ratio requirement

The Polish Financial Supervision Commission (KNF) reported on remarks by its Chair, Jacek Jastrzebski, made during the announcement of a European Financial Congress recommendation on covered bonds and a discussion on development opportunities for Poland’s covered bond market. In his intervention, Jastrzebski pointed to KNF-led discussions and workshops with market participants on an optimal covered bond issuance model, which he said resulted in identifying an “optimum mortgage banking model in the light version” and an optimal specialised issuance vehicle structure. He also indicated that some requirements applicable to mortgage banks should be reviewed and referenced amendments to the rules on outsourcing. Separately, he linked the covered bond agenda to the Long-Term Funding Ratio project, describing the ratio as a supervisory requirement intended to address a long-standing structural maturity mismatch in Polish banks’ balance sheets and to support covered bond supply as part of financial stability objectives.