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Annual report of the Bank Guarantee Fund
2020
The Regulation of the Minister of Finance of 23 March 2020 amending the Regulation on the manner of determining the risk
profile of banks and branches of foreign banks and taking this profile into account in determining contributions to the banks’
guarantee fund entered into force on 1 April 2020. The change consisted in increasing the reduction of the contribution paid
to the banks’ guarantee fund by banks participating in the IPS by increasing the obligatory discount for the total risk weight
from 50% to 80%. Such a change was proposed by the Fund and its purpose was to strengthen the supporting function
of the protection schemes.
As a result of the aforementioned regulation, the increased IPS relief applied to contributions to the banks’ guarantee fund
starting from Q2 2020.
As for the method of calculating contributions to the credit unions’ guarantee fund, the changes resulted only from changes
in their reporting and consisted in modifying the definitions of selected risk indicators accordingly. The changes in the
method of calculating contributions to the credit unions’ guarantee fund were adopted by way of a resolution of the Fund’s
Management Board. Changes in the definitions of risk indicators resulting from changes in reporting do not require the
Commission’s approval; however, the Fund is obliged to inform the KNF about them within one month from the day they
were made.
In connection with the negative impact of the Covid-19 pandemic on the situation of the banking sector, the Fund analysed
possibilities of reducing the burden of banks’ contributions to the BFG. Implementing the recommendation of the Fund’s
Council, information material was prepared on the amount of future contributions to the banks’ guarantee fund and the
banks’ resolution fund, assuming different scenarios for constructing the financial resources of the BFG, including changes
in the amount of the target levels of individual funds and the dates of their achievement.
In October, the Fund submitted a letter to the President of the NBP, in his capacity as Chairman of the Financial Stability
Committee on macroprudential supervision (KSF-M), to place the issue of the level of contributions to the guarantee and
resolution funds on the agenda of the December meeting of the KSF-M. After discussing the proposals presented by the
BFG at that meeting, the KSF-M recommended that the working group develop a recommendation on extending the
period for achieving the target level of the deposit guarantee scheme funds in banks, which would allow for a reduction
in 2021 – as compared to 2020 – of contributions to the banks’ guarantee fund
5
.
In 2020, the Fund carried out investment activities in accordance with the 2020 Investment Policy, the main objective
of which was to provide financial resources for possible interventions and to safeguard the Fund’s portfolio of securities
against the risk of adverse changes in market yields, while achieving optimum profitability. These activities were conducted
pursuant to the BFG Act, under which the Fund may acquire securities issued, guaranteed or underwritten by the
State Treasury, the NBP and the governments or central banks of EU Member States or the Organisation for Economic
Co-operation and Development (OECD). Furthermore, the Fund may acquire participation units in money market funds and
open deposits at the NBP and the Minister of Finance.
8.3 Investing activities
5
On 18 January 2021, the Financial Stability Committee adopted a resolution on recommendations to reduce the burden of financing the banks’ guarantee
fund. The recommendations are addressed to the Bank Guarantee Fund and the Minister of Finance.
Contents
Annual report of the Bank Guarantee Fund
2020
The Regulation of the Minister of Finance of 23 March 2020 amending the Regulation on the manner of determining the risk
profile of banks and branches of foreign banks and taking this profile into account in determining contributions to the banks’
guarantee fund entered into force on 1 April 2020. The change consisted in increasing the reduction of the contribution paid
to the banks’ guarantee fund by banks participating in the IPS by increasing the obligatory discount for the total risk weight
from 50% to 80%. Such a change was proposed by the Fund and its purpose was to strengthen the supporting function
of the protection schemes.
As a result of the aforementioned regulation, the increased IPS relief applied to contributions to the banks’ guarantee fund
starting from Q2 2020.
As for the method of calculating contributions to the credit unions’ guarantee fund, the changes resulted only from changes
in their reporting and consisted in modifying the definitions of selected risk indicators accordingly. The changes in the
method of calculating contributions to the credit unions’ guarantee fund were adopted by way of a resolution of the Fund’s
Management Board. Changes in the definitions of risk indicators resulting from changes in reporting do not require the
Commission’s approval; however, the Fund is obliged to inform the KNF about them within one month from the day they
were made.
In connection with the negative impact of the Covid-19 pandemic on the situation of the banking sector, the Fund analysed
possibilities of reducing the burden of banks’ contributions to the BFG. Implementing the recommendation of the Fund’s
Council, information material was prepared on the amount of future contributions to the banks’ guarantee fund and the
banks’ resolution fund, assuming different scenarios for constructing the financial resources of the BFG, including changes
in the amount of the target levels of individual funds and the dates of their achievement.
In October, the Fund submitted a letter to the President of the NBP, in his capacity as Chairman of the Financial Stability
Committee on macroprudential supervision (KSF-M), to place the issue of the level of contributions to the guarantee and
resolution funds on the agenda of the December meeting of the KSF-M. After discussing the proposals presented by the
BFG at that meeting, the KSF-M recommended that the working group develop a recommendation on extending the
period for achieving the target level of the deposit guarantee scheme funds in banks, which would allow for a reduction
in 2021 – as compared to 2020 – of contributions to the banks’ guarantee fund
5
.
In 2020, the Fund carried out investment activities in accordance with the 2020 Investment Policy, the main objective
of which was to provide financial resources for possible interventions and to safeguard the Fund’s portfolio of securities
against the risk of adverse changes in market yields, while achieving optimum profitability. These activities were conducted
pursuant to the BFG Act, under which the Fund may acquire securities issued, guaranteed or underwritten by the
State Treasury, the NBP and the governments or central banks of EU Member States or the Organisation for Economic
Co-operation and Development (OECD). Furthermore, the Fund may acquire participation units in money market funds and
open deposits at the NBP and the Minister of Finance.
8.3 Investing activities
5
On 18 January 2021, the Financial Stability Committee adopted a resolution on recommendations to reduce the burden of financing the banks’ guarantee
fund. The recommendations are addressed to the Bank Guarantee Fund and the Minister of Finance.
Contents
