MPC fears euro-zone banks' troubles may decrease loan supply in Poland.

By bne IntelliNews November 18, 2011
Several members of the Monetary Policy Council (MPC) deem that the crisis in the euro area would have an impact on the Polish economy not only through a possible decline in the demand for Polish exports, but also through a possible decline in the supply of loans granted by foreign-owned domestic banks which, in line with the recommendations of the euro-zone summit, would strive to improve their capital situation, according to "minutes" of MPC's November sitting. Some Council members argued, however, that business operations of domestic banks generated considerable profits for their foreign owners, and hence the risk of significant lending constraints was not great. Recently, central bank representatives spoke of the need for Polish capital stepping in as the current turmoil in the euro-zone means that some banks in Poland may become orphans because their parent banks are in trouble. Indeed, they hinted that the central bank might help Polish institutions by providing refinancing loans for possible take-overs.

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