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NSFR regulations – real challenge for banking sector in Poland?

NSFR regulations – real challenge for banking sector in Poland?. Panel discussion – 5th Banking Forum April, 2013 Maciej Rapkiewicz, Instytut Sobieskiego. Net Stable Funding Ratio (NSFR). A ims to ensure banks are able to survive an extended closure of wholesale funding markets.

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NSFR regulations – real challenge for banking sector in Poland?

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  1. NSFR regulations –real challenge for banking sector in Poland? Panel discussion – 5th Banking Forum April, 2013 Maciej Rapkiewicz, Instytut Sobieskiego

  2. Net StableFundingRatio (NSFR) • Aims to ensure banks are able to survive an extended closure of wholesale funding markets. • The NSFR can be summarised as the requirement for a minimum amount of‘stable funding’ over a one year time horizon based on liquidity risk factorsassigned to assets, off‐balance sheet liquidity exposures and othercontingent funding obligations. • Is intended to deal with longer-term structural liquidity mismatches by establishing a minimum acceptable amount of stable funding based on the liquidity characteristics of a bank's assets and activities over a one-year horizon. • Implementation is scheduled for 2018. 34.5% of assets Mismatch between the maturities of banks' deposits and loans in Poland (Dec. 2012) 5.3% of liabilities Polish Financial Supervision Authority (KNF) ”Information about banking sector – Jan.-Sep., 2012” Mismatch between the maturities of banks’ deposits and loans is described as a ”adverse effect” and excessive dependency of lending on short term deposits. Source of Data: KNF

  3. Threats for growth of loans Annual growth rate of liabilities from banks and branches of credit institutions Non-residents KNF: ”Decreasing in foreign fundingis a factor for stability of the system , but on the otherhand, leads to limited lendingopportunities.” Afterexcludingtheimpact of exchangerates Zloty term deposits Decreasinginspread (WIBOR – deposits) Source of Data: NBP

  4. Some banks already faces problems with profitability of long-term loans Share of banks with a certain profitability of housing loans Source of Data: NBP Over 30% of the sector not making a profit in regard to long-term loans

  5. The development of long-term, stable sources of funding is essential Solutions: • Long-term bonds/deposits • MBS - mortgagebacked securities • Securitisation • Securitisationin Poland: • market of performing loanshardlyexists – onlytwosignificanttransactions in the lastdecade: • (2006 – 270 mln euro; 2012 – 1 bln PLN) • non–performing loans (NPLs): • • December 2012 – NPLs in banks’ balancesheets – approx 71.7 bln PLN. • • transactions – value in 2012: approx 9.3 bln PLN.

  6. Instytut Sobieskiegowww.sobieski.org.pl Contact: Maciej Rapkiewicz, Member of theBoard e-mail: maciej.rapkiewicz@sobieski.org.pl Mobile: 503 127 020

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