Page 28
P. 28
28
Annual report of the Bank Guarantee Fund
2020
Shareholders of the institution under the resolution cover the losses and bear the cost of the resolution in the first
instance. For the purpose of providing supplementary financing for resolution, resolution funds were also created (one
for banks and investment firms and another for credit unions), to which contributions are made by all the entities covered
by the subjective scope of the BFG Act. As a result, the risk of having to commit public funds, which means taxpayers
incurring costs, was mitigated. The BFG may support resolution financially, provided that such support is in line with the
State Aid Rules.
In a resolution plan, the Fund specifies the preferred resolution tool, the application of which will make it possible to meet
the resolution objectives to the greatest extent possible. In practice, one cannot rule out the need to take supplementary
measures, not envisaged in the resolution plan, as market conditions or the structure of a given institution can change
to such a significant degree that any scenarios adopted ex ante at the resolution planning stage plan may prove less
effective in a given situation.
In 2020, after consulting the Polish Financial Supervision Authority on the amount of the designated MREL level, the Fund
adopted reviews of resolution plans and resolvability assessments for 209 cooperative banks, 2 affiliating banks, 11 credit
unions, 13 commercial banks and 7 investment firms.
In addition, the Fund adopted updates of resolution plans and resolvability assessments for two cooperative banks.
The Fund, acting as a group resolution authority, signed joint decisions on the adoption (update) of the group resolution
plan and determination of MREL for one of the banking groups.
In 2020, the BFG adopted a resolution plan for a brokerage house which, as a result of the extension of the brokerage
licence for this entity by the KNF in January 2020, gained the status of an investment firm within the meaning of Article
2(14) of the BFG Act.
Moreover, in the reporting period, the Fund issued 44 opinions on the expected impact of the implementation of recovery
plans on resolution, including 11 opinions for 10 cooperative banks (in the case of one cooperative bank, an opinion on
the recovery plan was issued twice), 2 opinions for an institutional protection scheme, 10 opinions for investment firms,
11 opinions for 10 commercial banks (in the case of one commercial bank, an opinion on the recovery plan was issued
twice), and 10 capital groups.
The BFG is involved in the activities of resolution colleges established for EU cross-border groups carrying out activities
in the territory of the Republic of Poland through subsidiaries being banks or investment firms.
5.2 Resolution planning
Pursuant to Article 89 of the BFG Act, the Fund shall review resolution plans and group resolution plans as well
as carry out resolvability assessments at least once a year.
Contents
Annual report of the Bank Guarantee Fund
2020
Shareholders of the institution under the resolution cover the losses and bear the cost of the resolution in the first
instance. For the purpose of providing supplementary financing for resolution, resolution funds were also created (one
for banks and investment firms and another for credit unions), to which contributions are made by all the entities covered
by the subjective scope of the BFG Act. As a result, the risk of having to commit public funds, which means taxpayers
incurring costs, was mitigated. The BFG may support resolution financially, provided that such support is in line with the
State Aid Rules.
In a resolution plan, the Fund specifies the preferred resolution tool, the application of which will make it possible to meet
the resolution objectives to the greatest extent possible. In practice, one cannot rule out the need to take supplementary
measures, not envisaged in the resolution plan, as market conditions or the structure of a given institution can change
to such a significant degree that any scenarios adopted ex ante at the resolution planning stage plan may prove less
effective in a given situation.
In 2020, after consulting the Polish Financial Supervision Authority on the amount of the designated MREL level, the Fund
adopted reviews of resolution plans and resolvability assessments for 209 cooperative banks, 2 affiliating banks, 11 credit
unions, 13 commercial banks and 7 investment firms.
In addition, the Fund adopted updates of resolution plans and resolvability assessments for two cooperative banks.
The Fund, acting as a group resolution authority, signed joint decisions on the adoption (update) of the group resolution
plan and determination of MREL for one of the banking groups.
In 2020, the BFG adopted a resolution plan for a brokerage house which, as a result of the extension of the brokerage
licence for this entity by the KNF in January 2020, gained the status of an investment firm within the meaning of Article
2(14) of the BFG Act.
Moreover, in the reporting period, the Fund issued 44 opinions on the expected impact of the implementation of recovery
plans on resolution, including 11 opinions for 10 cooperative banks (in the case of one cooperative bank, an opinion on
the recovery plan was issued twice), 2 opinions for an institutional protection scheme, 10 opinions for investment firms,
11 opinions for 10 commercial banks (in the case of one commercial bank, an opinion on the recovery plan was issued
twice), and 10 capital groups.
The BFG is involved in the activities of resolution colleges established for EU cross-border groups carrying out activities
in the territory of the Republic of Poland through subsidiaries being banks or investment firms.
5.2 Resolution planning
Pursuant to Article 89 of the BFG Act, the Fund shall review resolution plans and group resolution plans as well
as carry out resolvability assessments at least once a year.
Contents
