krzysztof rybinski : sepa and the payment system in poland speech by mr krzysztof rybinski, deputy president of the national bank of poland, at the 13th bank forum “ regulatory changes in european banking – outcomes for banks and the economy in poland ”, warsaw, 14 march 2007. * * * welcome to the session devoted to the sepa project – single euro payments area – in the context of the polish payment system. when you google sepa, the first website on the results list is the site of the scottish environment protection agency, but what closely follows is the ecb ’ s website on sepa ( single euro payments area ). the pagerank of both these sites is 6, which means that they are important in the internet. since the introduction of the euro banknotes and coins in 2002, consumers have been able to make cash payments throughout the euro area from a single purse using a single currency. the sepa project represents the next major step towards closer european integration ; it will allow consumers to make cashless payments throughout the euro area from a single account under the same basic conditions, regardless of their location. in 2002, the banking industry took up this challenging project by creating the european payments council ( epc ). the epc is defining the new rules and procedures for euro payments. to do that, it has involved not only the stakeholders in the euro area, but also those in other countries of the european union, poland obviously included, as well as iceland, liechtenstein, norway and switzerland. communities outside the euro area will thus have the opportunity to participate in euro payment systems, and will be able to adopt sepa standards and practices, thereby contributing to the establishment of a single market for payment services. the epc plans first sepa products to come on the market at the beginning of the next year. therefore, today ’ s bank forum is an excellent opportunity for an in - depth discussion on the role and place of the polish payment infrastructure in the sepa world. ladies and gentlemen, i am pleased to present you the discussants of our panel, in alphabetical order : mr. ryszard druzynski, vice president of raiffeisen bank polska, mr. krzysztof kalicki, president of the management board of deutsche bank polska, mr. ronnie richardson, president of the management board of kredyt bank, mr. witold zielinski, vice president of the management

scale and impetus of price adjustments, should a bubble burst. open pension funds are one of the main sources of demand on the stock market. from their very beginning, they have recorded average monthly inflows of pln 870 million, the value of equities in their portfolio have exceeded pln 51. 5 billion, whereas their share in free float has amounted to ca. 22 %. the assets held by open pension funds are likely to continue their rising path. as estimated, their credit debit balance will stabilize to report a balanced position only in 2031 7. in addition, the past quarters saw high demand of investment funds for equities. meanwhile, despite a large number of debuts, the value of equities introduced to the warsaw stock exchange is relatively low. by way of illustration, in 2004, the value of public offers amounted to pln 13. 2 billion ( including pln 7. 9 billion of pko bp's issue ) ; in 2006 it was pln 4. 2 billion, whereas in the first nine months of 2007 it was pln 6. 4 billion. the prevalence of sme sector in the structure of wse debuts is the factor behind these statistics. consequently, the supply - demand imbalance on the stock market was one of the reasons for the strong price rise, which may not always be explained by fundamental factors. for example, the p / e ratio for medium - sized companies included in the mwig40 index rose from 9. 0 to 34. 7 between january 2005 and june 2007, and this growth was even higher in the category of smaller companies. excess concentration of investments on a small number of markets poses a particular challenge, should an asset bubble develop and burst. this development would be the more dangerous that open pension funds cannot hedge their portfolios against the fall in prices. it is worthwhile to mention that pursuant to the regulation of the council of ministers of 13 september 2005 8, it was anticipated that as from 1 january 2006, open pension funds could take recourse to derivatives to provide hedging to their investment portfolios. regretfully, in december 2005, this regulation was repealed 9, and henceforth, as of today, should prices go into a significant decline, open pension funds have no other instruments to hedge the value of their portfolios but to sell some of their equities. given a high value of share portfolio, such a sale would significantly aggravate the decline. i believe that joint