EN 
 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 9 October 2007 
at the request of the Polish Minister for Finance  
on a draft law amending the Law on the supervision of financial markets 
(CON/2007/31) 
 
Introduction and legal basis  
On 16 August 2007 the European Central Bank (ECB) received a request from the Polish Minister for 
Finance for an opinion on a draft law amending the Law of 21 July 2006 on the supervision of financial 
markets1. On 23 August 2007, the ECB received a revised version of a draft law amending the Law on the 
supervision of financial markets (hereinafter the ‘draft law’). 
The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the third and sixth indents of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities regarding draft 
legislative provisions
2, as the draft law relates to Narodowy Bank Po lski (NBP) and to rules applicable to 
financial institutions insofar as they materially influen ce the stability of financial institutions and markets.  
In accordance with the first sentence of Article 17.5 of  the Rules of Procedure of the European Central 
Bank, the Governing Council has adopted this opinion.  
 1.  Purpose of the draft law 1.1 The draft law modifies certain elements of  the supervisory reform, which was initiated in 
September 2006 and originally scheduled to be implemented by 1 January 2008. Prior to the 
introduction of the reform, financial supervision w as carried out by sectoral supervisors, including, 
for the banking sector, the Banking Supervision Commission
3 chaired by NBP’s President and 
assisted by the General Inspectorate for Banking Supe rvision (a specialised supervisory unit within 
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1  Dz.U. of 4 September 2006 No 157, Item 1119,  as amended (hereinafter the ‘Law on th e supervision of financial markets’). 
2  OJ L 189, 3.7.1998, p. 42. 
3  The composition of the Banking Supervision Commission before  19 September 2006 was as follows: (i) NBP’s President, 
as Chairman; (ii) the Minister for Finance or his representativ e, as Vice-Chairman; (iii) another representative appointed by 
the Minister for Finance; (iv) the repres entative of the President of the Republic; (v) the Chairman of the Bank Guarantee 
Fund; (vi) the Chairman of the Securities and Exchange Commi ssion or deputy thereof; and (v ii) the General Inspector for 
Banking Supervision (Article 26(1) of the Law on Narodowy Bank Polski of 29 A ugust 1997 (consolidated text: Dz.U. of 
1 April 2005 No 1, Item 2, as amende d; hereinafter the ‘NBP Statute’)) . 
2 NBP)4. The reform introduced a single consolidated s upervisory authority, the Financial Supervision 
Commission (FSC)5, which is gradually taking over supervis ory responsibility for all segments of the 
financial markets6. One result of this process is that the Banking Supervision Commission is 
scheduled to be dissolved on 31 December 2007, foll owing which its powers will be allocated to the 
FSC7. At the same time, the supervisory staff of the General Inspectorate for Banking Supervision 
will be transferred to the FSC’s office8. During the transitory period from 19 September 2006 to 
31 December 2007 the FSC Chairman replaces NBP’s President as the Banking Supervision Commission Chairman
9.  
1.2 The draft law modifies the supervisory framework as follows10: 
(a) the transfer of banking supervision respons ibility from the Banking Supervision Commission 
to the FSC will be dela yed until 1 January 201311. During the transitory period from the 
effective date of the draft law12 until 31 December 2012: (i) NBP’s President will take over as 
Chairman of the Banking Supervision Commission13; and (ii) the General Inspectorate for 
Banking Supervision will remain within NB P and will assist the Banking Supervision 
Commission in its work14; 
(b) as of the effective date of the draft law, the FSC will include three FSC Vice-Chairmen who 
will be appointed and dismissed by the President  of the Council of Ministers on the motion of 
the Minister for Finance, NBP’s President and the FSC Chairman, respectively (currently the 
two FSC Vice-Chairmen are appointed and dismissed on the motion of the FSC Chairman)15; 
and 
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4  Article 25(1) and Article 29 of the NBP Statute. 
5  The current composition of the FSC is as follows: (i) the FSC  Chairman, appointed by the President of the Council of 
Ministers for a five year term in office; (ii) two FSC Vice-Chairmen, appointed and dismissed by the President of the 
Council of Ministers on the motion of the FSC Chairman; (iii) th e minister responsible for financial institutions or his 
representative; (iv) the minister respons ible for social security (participating,  among other things, in the regulation of 
pension funds) or his representative; (v) NBP’s President or th e delegated Vice-President; and (v i) the representative of the 
President of the Republic (Article 5 and Articles 7 to 9 of the Law on th e supervision of financial markets). 
6  The FSC was established on 19 September 2006 and on this  date took over non-banking supervision responsibilities 
(supervision of capital markets and insura nce firms/pension funds: Article 67(1) toge ther with Article 65(1) of the Law on 
the supervision of financial markets). 
7  Articles 66 and Article 67(2) of the Law on the supervision of financial markets. 
8  Article 74(4) together with Article 75(2) of th e Law on the supervision of financial markets. 
9  Article 77(2) of the Law on the supervisi on of financial markets. The Law provides that NBP’s President (or delegated 
Vice-President) will continue to participate in the Ba nking Supervision Commission as an ordinary member. 
10  The proposed amendments affect  the Law on the supervision of financia l markets as well as, among others, the NBP 
Statute and the Law on banking of 29 August 1997 (consolidat ed text: Dz.U. of 12 June 2002 No 72, Item 665, as 
amended, hereinafter th e ‘Law on banking’). 
11  Article 1(6) of the draft law, amending Article 67(2) of the Law on the supervision of financial markets. 
12  Entry into force is 14 days after the draft law is published (Article 17). 
13  Article 14(1) together with Article 1(12) of the draft law, which repeals Article 77(2) of the Law on the supervision of 
financial markets. 
14  Article 1(5) of the draft law, amending Article 66(2) of the Law on the supervision of financial markets. 
15  Article 1(1) and (2) of the draft law, amending Articles 5(1) and 9(1) of the Law on the supe rvision of financial markets 
(the change does not have any foreseen end date). The candi dates for the positions of FSC Vice-Chairmen have to comply 
with the same statutory criteria as the candidate for the pos ition of the FSC Chairman. The FSC Chairman will be consulted 
on candidates for the FSC Vice-Chairmen presented by the Minister for Finance and NBP’s President. 
3 (c) NBP will become responsible  for establishing a Financial Stability Committee, which will act 
on the basis of an agreement between NBP, th e Banking Supervision Commission, the FSC, 
the Bank Guarantee Fund and the Minister for Finance, with the view to ensuring the 
exchange of information and coordination betw een the parties to the agreement as regards 
implementation of their respective statutory tasks16. 
 
2. Central bank contribution to prudential supervision 2.1 Organisation of the supervisory framework 
 The ECB commented on the original reform proposals in 2006
17. In its opinions, the ECB stressed its 
positive assessment of the model of prudential supervision existing in Poland prior to 
September 2006, in which banking supervision was carried out by the Banking Supervision 
Commission, chaired by NBP’s President and assisted by the General Inspectorate for Banking Supervision. The ECB considered this model partic ularly well-suited to facilitate NBP’s contribution 
to the prudential supervision of credit institutions  and to the stability of the financial system, as 
required under Article 105(5) of the Treaty in the context of the future introduction of the euro in Poland
18. This is in particular relevant for financia l markets such as the Polish one, where banking is 
a dominant sector and where banks remain key agents of financial intermediation19. The ECB 
emphasised the central banks’ pivotal role in the financial system on many occasions, stressing that their close involvement in prudential supervision is  necessary to allow central banks to adequately 
monitor financial stability risks
20. Therefore, the ECB welcomes the draft law provisions that 
strengthen NBP’s involvement in financial market supervision by reassigning the chairmanship of 
the Banking Supervision Commission to NBP’s President. Moreover, by maintaining NBP’s 
President as a member of the FSC and giving him the power to designate one of the FSC Vice-
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16  Article 4(2)(b) of the draft law, adding Article 131(8) to ( 11) to the Law on banking. The Financial Stability Committee 
will include the following members: (i) NBP’s President; (ii)  the General Inspector for Banking Supervision; (iii) one 
further representative appointed by NBP’s President; (iv) th e minister responsible for financial institutions or his 
representative; (v) the FSC Chairman; (vi)  the Chairman of the Management Boar d of the Bank Guarantee Fund; and (vii) 
the representative of the President of the Republic. 
17  ECB Opinion CON/2006/15 of 9 March 2006 at the request of the Polish Minister of Finance on a draft Law on the 
supervision of financial institutions (an early version of the Law on the supervision of financial markets). The ECB 
specifically recommended: (i) that NBP appoint members to the supervis ory authority’s decision-making body; (ii) 
establishing express duties of cooperation and information-sh aring between NBP and the supervisory authority; and (iii) 
that NBP participate in major supervisory de cisions or in selected types of supervis ory operations (see paragraphs 2.3, 2.4, 
3.2, 3.3 and 3.5 of Opinion CON/2006/15). The ECB had the o pportunity to repeat its comments on the reform in ECB 
Opinion CON/2006/39 of 2 August 2006 at the request of Po land’s Sejm Marshall on a draft law amending the Law on 
Narodowy Bank Polski. 
18  See paragraph 3.1.1 of Opinion CON/2006/15 and paragraph 4.1 of Opinion CON/2006/39. 
19  See paragraph 2.1.4 of Opinion CON/2006/15; see also Eur opean Central Bank, ‘Financial Sectors in the EU Accession 
Countries’, 19 August 2002, p. 172 and  ‘Banking structures in the new EU Memb er States’, 31 January 2005, p. 38. Both 
publications are avai lable on the ECB’s website at www.ecb.int . 
20  See, e.g. paragraph 6 of ECB Opinion CON/2003/23 of 24 Octo ber 2003 at the request of the Ministry of Finance of the 
Netherlands on a draft law on provisions concerning the merger  of De Nederlandsche Bank a nd the Pensions and Insurance 
Supervisory Authority Foundati on; paragraph 4 of ECB Opinion CON/2001/10 of 25 May 2001 at the request of the 
Austrian Ministry of Finance on a draft article of the Fe deral law establishing and organising the financial market 
supervisory authority (title  shortened); and paragraph 2.1.2 of Opinion CON/2006/15. 
4 Chairmen, the draft law’s provisions will e nhance coordination between NBP and the FSC, 
facilitating consistent macro-prudential monitoring of the increasingly integrated financial markets21. 
 2.2 Ensuring a stable, long-term supervisory environment 
 The explanatory memorandum states that the add itional delay (until 1 January  2013) in transferring 
banking supervision responsibility from the Ba nking Supervision Commission to the FSC is 
necessary in order to, among other things: (i) ensu re the smooth continuation of the follow-up 
supervisory work related to the transposition of the Capital Requirements Directives (CRD)
22; and 
(ii) mitigate operational risks arising in connection w ith the supervisory reform process, in particular 
as regards maintaining the expertise of NBP’s supervisory staff23. The consulting authority’s remarks 
mirror the ECB’s concerns which we re expressed in its earlier opinions24. It is important to 
emphasise that the supervisory reform process should ensure the uninterrupted continuation of 
NBP’s involvement in prudential supervision as we ll as sustainability of the supervisory expertise 
developed by NBP staff. As already noted by th e ECB in the specific context of Member States 
preparing for the introduction of the euro, the inde pendence, credibility and experience that national 
central banks can contribute to the conduct of prudential policies should be recognised as an 
important institutional asset25.  
2.3 In this context, the provisions of the draft la w concerning the transfer of the Banking Supervision 
Commission’s powers to the FSC on 1 January 2013 and the coincident assignment of NBP’s supervisory staff to FSC’s office
26 may not provide the necessary incentives for NBP and its 
supervisory staff to continue developing the su pervisory function. Therefore, the temporary 
arrangements provided for by the draft law, wh ile mitigating the above mentioned short- and 
medium-term risks, may not ensure the creation of a stable, long-term supervisory environment. An 
essential precondition for an efficient and effective su pervisory framework is its capacity to build a 
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21  See, e.g. paragraph 5 of ECB Opini on CON/2004/16 of 11 May 2004 at the request of the Italian Ministry of Economic 
Affairs and Finance on a draft law on the protection of savings and paragraph 2.1.3 of Opinion CON/2006/15. 
22  Section 2 of the explanatory memorandum to the draft la w. The ‘Capital Requirement s Directives’ are Directive 
2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the 
business of credit institutions (recast) (OJ L 177, 30.6.2006, p.  1). Directive as last amende d by Directive 2007/44/EC (OJ 
L 247, 21.9.2007, p.1) and Directive 2006/49/EC of the Europe an Parliament and of the Council of 14 June 2006 on the 
capital adequacy of investment firms and credit inst itutions (recast) (OJ L 177, 30.6.2006, p. 201). The Capital 
Requirements Directives have been im plemented in Poland by the Law of 26 January 2007 amending the Law on banking 
(Dz.U. of 9 March 2007 No 42, Item 272) and by resolutions  of the Banking Supervision Commission (Nos 1 to 6/2007 of 
13 March 2007). 
23  Section 3 of the explanatory memorandum to the draft law. 
24  The ECB pointed out risks related to interrupting long-te rm supervisory work stemming from the CRD reform and 
emphasised the importance of preserving c ontinuity in supervisory expertise po ssessed by the staff of NBP’s General 
Inspectorate for Banking Supervision (see paragraphs 6.1 and 6.3 of Opinion CO N/2006/1 and paragraph 2.2 of Opinion 
CON/2006/39). 
25  See paragraph 7 of ECB Opinion CON/2004/31 of 22 Septem ber 2004 at the request of Národná banka Slovenska on a 
draft law on the supervision of the financial market and on amendments to certain laws. 
26  NBP’s supervisory staff of the General Inspectorate for Banking S upervision will be transferred to the FSC’s office as of 1 
January 2013 and their employment contracts will expire afte r a six-month period, unless they receive and accept new 
employment conditions (Article 1(9) a nd (10) of the draft law, amending Articles 74(4) and 75(2) of the Law on the 
supervision of financial markets). 
5 long-term relationship of mutual trust between s upervisors and market participants providing the 
latter with confidence in the expertise and compet ence of the supervisory authority. Hence, any 
reform of the institutional supe rvisory setting should aim at comp rehensive long-term arrangements 
that are conducive to a stable economic climate.  
2.4 This opinion is based on the mo st recent version of the draft la w, which the ECB understands may 
not be the final legislative proposal concerning the s upervisory reform. In case new legislative drafts 
are proposed which constitute ‘draft legislativ e provisions’ within the meaning of Decision 
98/415/EC, the ECB should be consulted and sta nds ready to provide its comments. This is 
particularly important where newly proposed drafts  fundamentally change legislation in areas in 
which the ECB has a specific interest27. 
2.5 Supervision and oversight over payment  and settlement infrastructure 
 The draft law corrects the provisions of the law transposing Directive 98/26/EC of the European 
Parliament and of the Council of 19 May 1998 on  settlement finality in payment and securities 
settlement systems28 that refer to a defunct sectoral supe rvisor as the body supervising securities 
settlement systems. The draft law corrects these references by inserti ng the name of the FSC in the 
relevant provisions, while not furt her affecting any substantive rules29. The ECB welcomes the 
correction and notes that it would need to be fu rther consulted on any substantive legislative 
proposals in this area falling within its scope of comp etence; this applies in particular to provisions 
on the supervision and oversight of market infrastructure30. 
 3. Establishment of the Financial Stability Committee 3.1 The ECB welcomes the draft law provisions under which NBP will establish a Financial Stability 
Committee
31. The explanatory memorandum to the draft law explains that this is necessary in the 
context of building the institutional framework for the prevention, forecasting and management of 
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27  See paragraph 3 of Opinion CON/2004/16.  
28  OJ L 166, 11.6.1998, p. 45. The Dire ctive was transposed by the Law of 24  August 2001 on settlement finality in the 
payment and settlement system s and on the supervision of such systems (Dz. U. of 25 October 2001 No 123, Item 1351, as 
amended, hereinafter, the ‘Law on settlement finality’). 
29  Article 1(15) of the draft law amends  Article 82(2) of the Law on the supervis ion of financial markets by deleting the 
reference to the Law on settlement finality from the list of le gislative provisions to be am ended on the date the Banking 
Supervision Commission is dissolved. Conse quently, the day on which the draft law enters into force will be the day the 
changes to the Law on settlement finality enter into force. 
30  See the fifth indent of the Article 2 of Council Decision 98/415/EC on the consultation of the European Central Bank by 
national authorities regarding draft legislative provisions (O J L 189, 3.7.1998, p. 42), requiring consultation with the ECB 
on draft legislative provisions concerning  ‘payment and settlement sy stems’. Article 1(2) of Decision 98/415/EC specifies 
that the term ‘draft legislative provisi ons’ does not include ‘draft provisions the exclusive purpose of which is the 
transposition of Community directives in to national law’. In May 2007, a legislative draft was submitted to the Polish 
Parliament which substantially amended provisions of the Law on  settlement finality, including the definition of a ‘system’ 
and the scope of the President of NBP’s powers in the area of  the supervision of payment a nd settlement infrastructure (see 
Article 13 of the draft law on amendments to the law on trading in financial instruments and to certain other laws, as 
submitted by the Council of Ministers to Sejm (Parliament) on 23 May 2007 (Sejm print No 1789)). The legislative process 
related to this legislative draft is currently at a standstill. 
31  Article 4(2)(b) of the draft law, adding Article 131(8) to ( 11) to the Law on banking. See also paragraph 3.4 of Opinion 
CON/2006/15. 
6 financial crises. The ECB supports this statutory intent; however, the ECB recommends that the legal 
framework of the Financial Stability Committee be more precisely formulated  to ensure that the 
effectiveness of the coordination process is not a ffected by possible uncerta inties regarding the role 
of the Committee and its participating bodies32. In particular, it should be clarified that the tasks 
attributed to this Committee must not compromise  NBP’s independence with regard to its central 
bank tasks. In addition, the NBP Statute s hould expressly recognise NBP’s responsibility for 
contributing to financial stability by monitoring an d assessing the financial system as a whole, which 
is a separate function from fina ncial supervision and regulation33.  
3.2 Moreover, the composition of the Committee should reflect the contribution of each of its members 
in respect of their specific supervisory powers; th e existing discrepancy between the list of parties 
adopting the agreement establishing the Financ ial Stability Committee and the list of Committee 
members should be resolved34. At the same time, the Financial Stability Committee tasks should be 
more clearly specified35. Finally, the current provisions relating to information-sharing within the 
Committee36 should be complemented with appropriate information disclosure standards consistent 
with Community law provisions regulating the exch ange of supervisory and statistical information37 
and the NBP Statute38. Such provisions should also be capable of facilitating the operation of 
relevant EU Memoranda of U nderstanding that the Polish authorities are signatories to.  
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32  See paragraph 11 of ECB Opinion CON/2002/13 of 24 April 2002 at  the request of the Belgian Ministry of Finance on a 
draft proposal for a law on prudential supervision of the financial sector and financial services. 
33  See paragraph 2.2 of Opinion CON/2006/15 and paragraph 4.2 of Opinion CON/2006/39. 
34  In particular, the Banking Supervisi on Commission is a party to the agreem ent establishing the Committee although its 
representation in the Committee is not clearly set out (the participation of NBP’s President in the Committee is not 
expressly linked to his chairmanship of the Banking Supervision Commission) (parag raphs (8) and (9) added to Article 131 
of the Law on banking by Article 4(2)(b) of the draft law). 
35  Article 131(8) of the Law on banking, as added by Article 4(2) (b) of the draft law limits the Financial Stability Committee 
tasks to co-ordination and information- sharing. However, Article 131(10)(1) of  the Law on banking, as added by the 
Article 4(2)(b) of the draft law makes it possible for the Fina ncial Stability Committee to ‘a dopt arrangements’ in relation 
to the statutory tasks of the parties establishing the Committe e. Furthermore, the explanatory memorandum to the draft law 
seems to give the Committee an active ro le in ‘managing’ financial crises. 
36  See Article 1(3) of the draft law adding Article 17(5) to the La w on the supervision of financia l markets (data disclosure by 
the FSC); Article 3 of the draft law, amending Article 38(10) of the Law of 14 December 1994 on the Bank Guarantee 
Fund (consolidated text: Dz.U. of 19 April 2007 No 70, Item  474) (data disclosure by the Bank Guarantee Fund); and 
Article 5(2) of the draft law, adding Article 23(8) a nd (9) to the NBP Statute (data disclosure by NBP). 
37  See, in particular, Ar ticles 44 to 52 of Directive 2006/48/EC; Article  13 of Council Regulation (EC) No 322/97 of 
17 February 1997 on Community Statistics (OJ L 52, 22.2.1997, p.  1). Regulation as last amended by Regulation (EC) No 
1882/2003 of the European Parliament and the Council (OJ L 284,  31.10.2003, p. 1); Article 8(1) to (3) of Council 
Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical information by the European 
Central Bank (OJ L 318, 27.11.1998, p. 8); and Article 3 of Council Regulation (Euratom, EEC) No 1588/90 of 11 June 
1990 on the transmission of data subject to statistical confidentiality to the Statis tical Office of the European Communities 
(OJ L 151, 15.6.1990, p. 1). Regulation as last amended by Regulation (EC) No 1 882/2003 of the European Parliament and 
of the Council (OJ L 284, 31.10.2003, p. 1). 
38  See Article 23(6) and (7) of the NBP Statute.  
7  
This opinion will be published on the ECB’s website.  Done at Frankfurt am Main, 9 October 2007.  
[signed] 
 
The Vice-President of the ECB 
Lucas D. PAPADEMOS