The Second Stage of Banking Transformation in Poland
In 1989, new banking legislation opened the way to the establishment of a banking system adapted to the market economy. Ten years later, the vast majority of Polish banks are organized and function along the same lines as Western European banks. After having undergone systemic transformation in record time, the young Polish banking sector is now confronted with the problems arising from the liberalization of the financial markets. By becoming a member of the OECD in November 1996 and beginning negotiations with a view to joining the European Union, Poland has taken it upon itself to open its financial markets to the free movement of capital. This is a true challenge facing both the economy and the financial system in general, as well as the banking sector in particular. The latter, which remains the key feature of the Polish financial system, has thus been forced to accelerate its consolidation through bank privatization as well as mergers aimed at concentrating capital and thereby reinforcing the competitive position of merged banks.
According to Hanna Gronkiewicz-Waltz, governor of the central bank of Poland, ‘over the previous years, the Polish banking sector has quite naturally moved from quantitative development to qualitative development’ ( Gronkiewicz-Waltz, 1998). The analysis of this new phase in the evolution of Polish banking constitutes the main objective of the present study.
The first section of the chapter offers an overview of bank restructuring in Poland. Following a brief look at the origins of the current system, we present the results of bank restructuring achieved since 1989. In the following section, we indicate the progress made in elaborating a legal framework corresponding to European norms. Next, we provide data that shed light on the principal characteristics of the Polish banking sector.