Opinion of the European Central Bank of 2 August 2006 at the request of Poland’s Sejm Marshall on a draft law amending the Law on Narodowy Bank Polski (CON/2006/39)
Date: 2006-08-02
Institutions: European Central Bank
Subjects: Poland, appointment of staff, banking supervision, central bank, financial stability, financial supervision, institutional activity, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 2 August 2006 

at the request of Poland’s Sejm Marshall on  

a draft law amending the Law on Narodowy Bank Polski 

(CON/2006/39) 

Introduction and legal basis 

On 14 June 2006, the European Central Bank (ECB) received a request from Poland’s Sejm Marshall for 

an opinion on a draft law (hereinafter  the ‘draft law’) amending the Law on Narodowy Bank Polski of 
29 August 19971 (hereinafter the ‘Law on NBP’). 

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 provisions2, as the draft law relates to a national central bank, namely Narodowy Bank Polski 

(NBP), and to rules applicable to financial institutions insofar as they materially influence 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 

The  draft  law  proposes  to  amend  the  Law  on  NBP  by  modifying  the  composition  of  the  Banking 

Supervision Commission, currently a seven-member body chaired by the President of NBP and supported 
by NBP staff3. Following the draft law: 

(i)  

the  membership  of  the  Commission  would  be  expanded  to  include,  in  addition  to  the  current 

members,  three  representatives  of  Sejm  (one  of  the  two  Parliamentary  chambers)  and  a 

representative of the Council of Ministers’ President (the Prime Minister); and 

(ii) 

the chair of that Commission would be re-allocated from NBP’s President to a representative of the 
Prime Minister4.  

1  
2  
3  

4  

Consolidated text: Dz. U. of 2005, No 1, Item 2, as amended. 
OJ L 189, 3.7.1998, p. 42. 
Current membership of the Banking Supervision Commission: (i) the NBP’s President as Chair; and (ii) the Minister for 
Finance  or  the  appointed  Secretary/Undersecretary  of  State  in  the  Ministry  of  Finance  (as  deputy  Chair);  and  (iii)  the 
representative  of  Poland’s  President;  and  (iv)  the  Bank  Guarantee  Fund’s  Chair;  and  (v)  the  Securities  and  Exchange 
Commission Chair or Deputy; and (vi) the representative of the Minister for Finance; and (vii) the General Inspector of 
Banking Supervision (Article 26(1) of the Law on NBP). 
Article 1 of the draft law, modifying Article 26(1) of the Law on NBP. 

 
 
 
 
 
                                                 
2. 

General observations 

2.1  The  draft  law  was  proposed  in  parallel  with  another  legislative  proposal  aiming  at  a  broader 

modification of the institutional set-up for banking supervision in Poland, i.e. the draft law on the 
supervision of the financial market5, on whose earlier version the ECB commented in ECB Opinion 
CON/2006/156.  In  its  current  version,  the  draft  law  on  the  supervision  of  the  financial  market 

foresees  the  taking  over  of  the  banking  supervision  responsibilities  from  1  January  2008  by  a 
consolidated financial supervisor under the name of the Financial Supervision Commission (FSC)7. 

In  the  temporary  period  before  1  January  2008,  the  Banking  Supervision  Commission  would  be 
chaired by the Financial Supervision Commission’s Chair, appointed by the Prime Minister8.  

2.2  The  ECB  understands  that  only one  of  the  legislative  proposals  in  question –  i.e.  either  the  draft 

law  subject  to  current  consultation  or  the  draft  law  on  the  supervision  of  the  financial  market  – 

would  be  subject  to  further  legislative  work.  Whatever  the  Polish  legislator’s  final  decision,  the 

ECB would like to reaffirm its very positive assessment of the current institutional model for the 

prudential supervision of credit institutions in Poland, which ensures effective synergies between 

the  Banking  Supervision  Commission  and  NBP.  In  concurrence  with  the  recent  comments  by 
international bodies9, the ECB notes that any modification to the current arrangements will need to 

safeguard  the  effectiveness  of  the  Polish  supervisory  system  and  smooth  interaction  between  the 
relevant authorities. The on-going implementation of the recast Capital Requirements Directive10 is 

one  area  where  there  is  a  particular  need  to  ensure  the  continuity  of  supervisory  activities  and 

macro-prudential monitoring. 

2.3 

In  general,  the  ECB  has  consistently  favoured  the  involvement  of  central  banks  in  prudential 
supervision.  As  already  noted  in  the  ECB  Opinion  CON/2006/15  and  previous  ECB  opinions11, 

5  

6  

7  

8  

9  

10  

11  

The draft law on supervision of financial market, as adopted by Sejm  on 21 July 2006 (Sejm ref. No 802) and provided 
to Senat for review. 
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. 
The FSC is to be composed of:  (i) the FSC Chair, appointed by the Prime Minister for a five-year term in office; and 
(ii) the two FSC Deputy Chairs, appointed and dismissed by the Prime Minister on a motion by the FSC Chair; and (iii) 
the  Minister  responsible  for  financial  institutions  or  representative  thereof;  and  (iv)  the  Minister  responsible  for  social 
security or representative thereof; and (v) NBP’s President or the delegated Vice-President; and (vi) a representative of 
Poland’s  President  (Article  5(1)  in  conjunction  with  Article  3(1),  Article  68  and  Article  69(2)  of  the  draft  law  on  the 
supervision of the financial market). 
Article  80(2)  of  the  draft  law  on  the  supervision  of  the  financial  market.  Additionally,  as  a  result  of  winding-up  the 
Securities and Exchange Commission its Chair will cease to be a member of the Banking Supervision Commission. 
See International Monetary Fund, ‘Concluding Statement of the 2006 Article IV Consultation Mission’, 22 May 2006, 
paragraph  13,  as  published  on  the  IMF  website  (www.imf.org);  Organisation  for  Economic  Co-operation  and 
Development,  ‘Economic  Survey  of  Poland,  2006’,  28  June  2006,  p.  4,  as  published  on  the  OECD  website 
(www.oecd.org). 
Directive  2006/49/EC  of  the  European  Parliament  and  of  the  Council  of  14  June  2006  on  the  capital  adequacy  of 
investment  firms  and  credit  institutions  (recast)  (OJ  L  177,  30.6.2006,  p.  201).  See  paragraph  6.1  of  Opinion 
CON/2006/15. 
Paragraph  2.1.2  of  the  Opinion  CON/2006/15;  cf.  paragraph  4  of  ECB  Opinion  CON/2001/10  of  25  May  2001  at  the 
request  of  the  Austrian  Ministry  of  Finance  on  a  draft  Federal  law  establishing  and  organising  the  financial  market 
supervisory authority [title shortened]; paragraph 5 of ECB Opinion CON/2001/35 of 8 November 2001 at the request of 
the German Ministry of Finance on a draft law establishing an integrated financial services supervision. 

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maintaining  close  involvement  of  NCBs  in  prudential  supervision  is  an  important  condition  for 

allowing the Eurosystem to contribute adequately to monitoring the risks to financial stability in the 

euro area, in accordance  with Article 105(5) of the Treaty, and to safeguard smooth cooperation 

between  the  central  bank  functions  exercised  at  the  Eurosystem’s  level  and  the  supervisory 

functions carried out at national level.  

3. 

The banking supervisor’s operational independence 

3.1 

In  the  composition  of  the  Banking  Supervision  Commission  proposed  by  the  draft  law,  only  a 

minority of the members would exercise their function ex officio, i.e. as a result of a nomination for 
a  specified  public  office  (those  include:  NBP’s  President12,  the  General  Inspector  of  Banking 
Supervision13, the Chair of the Bank Guarantee Fund14, the Chair of the Securities and Exchange 
Commission15  and  the  Minister  for  Finance,  if  he  chooses  to  participate  directly  in  the 

Commission’s work). The remaining six members, including the Chair, would be representatives of 
the appointing institutions, subject to recalling of their mandate at any time16. Moreover, the ECB 

notes that the draft law provides neither for such members’ appropriate technical expertise nor for 

adequate safeguards against conflicts of interest.  

3.2  The  ECB  recommends  that  any  legislative  provisions  setting  out  an  institutional  framework  for 

prudential supervision foresee for the members of the supervisory authority the appropriate criteria 

for  technical  expertise  and  for  the  avoidance  of  any  conflict  of  interests,  as  well  as  adequate 

safeguards  for  decision-making  autonomy  in  pursuance  of  the  supervisory  mandate.  The  adopted 

legislative rules should ensure the supervisory authority’s operational independence, in compliance 
with international standards for the operational independence of banking supervisors17.  

4. 

The central bank’s financial stability role 

4.1  Under  the  current  provisions  of  the  Law  on  NBP,  NBP’s  President  acts  both  as  the  Chair  of  the 

Banking  Supervision  Commission  and  supervisor  of  the  General  Inspectorate  of  Banking 

12  

13  

14  

15  

16  

17  

NBP’s  President  is  appointed  and  dismissed  by  Sejm,  at  the  request  of  Poland’s  President,  for  a  term  of  six  years 
(Article 9(1) of the Law on NBP). 
NBP’s  President  appoints  and  dismisses  the  General  Inspector  of  Banking  Supervision,  acting  in  agreement  with  the 
Minister for Finance (Article 29(3) of the Law on NBP). 
The Fund’s Council appoints and dismisses the Bank Guarantee Fund’s Chair for the three-year term in office (while the 
Prime Minister, the Minister for Finance, NBP’s President and the Polish Bank Association are involved in appointing 
members to the Fund’s Council; Article 9(1) and (3) to (5), Article 6(1) to (3) of the Law on the Bank Guarantee Fund of 
14 December 1994, consolidated text: Dz.U. of 2000, No 9, Item 131, as amended). 
The Prime Minister appoints the Chair of the Securities and Exchange Commission, for a five-year term in office, acting 
on a motion he Minister responsible for financial institutions presented in agreement with NBP’s President (Article 8(2) 
of the Law of 29 July 2005 on supervision of the capital market, Dz. U. 2005 No 183, Item 1537). 
Such  would  be  the  status  of  the  following  members:  a  representative  of  the  Prime  Minister  in  their  capacity  as  the 
Commission’s  Chair,  a  representative  of  Poland’s  President,  three  Sejm  representatives  and  a  representative(s)  of  the 
Minister for Finance. 
See Bank for International Settlements, Core Principles for Effective Banking Supervision, September 1997, Principle 1; 
see  the  Consultative  Document  on  the  Core  Principles  for  Effective  Banking  Supervision,  April  2006,  Principle  1; 
documents available on the BIS website (www.bis.org). 

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Supervision,  which  is  an  organisational  unit  within  NBP’s  structure,  functioning  as  the  Banking 
Supervision  Commission’s  executive  arm18  and  closely  cooperating  with  other  relevant  NBP 

departments. As already noted in ECB Opinion CON/2006/15, this current structure allows NBP to 

properly  fulfill  its  financial  stability  role  and,  from  a  more  specific  Eurosystem  perspective,  is 

particularly  well-designed  to  facilitate  NBP’s  contribution  to  the  prudential  supervision  of  credit 

institutions  and  the  financial  system’s  stability,  as  required,  also  in  the  future  euro  accession 
context, under Article 105(5) of the Treaty19.  

4.2 

It is noted in this context that NBP’s financial stability role – as currently exercised on the basis of 

the abovementioned institutional arrangements – lacks specific legislative definition in the Law on 
NBP20. Assuming the implementation of a supervisory reform weakening the existing institutional 

relationship between NBP and the banking supervisory authority, the ECB recommends amending 

the Law on NBP, so as to specify that NBP has a formal responsibility for contributing to financial 

stability by monitoring and assessing the financial system as a whole, as a separate function from 
hands-on supervision and financial regulation21. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 2 August 2006. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

18  
19  
20  

21  

Articles 29(1) and 25(1) of the Law on NBP. 
See paragraph 3.1.1 of Opinion CON/2006/15. 
The  closest  legislative  provision  which  may  currently  imply  NBP’s  financial  stability  role  is  its  statutory  objective  to 
‘establish the necessary conditions for the development of the banking system’ (Article 3(2)(6) of the Law on NBP). See 
paragraph 2.2.1 of Opinion CON/2006/15.  
See paragraph 2.2.2 of Opinion CON/2006/15. 

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