Poland’s finance minister and central bank chief pledged to provide liquidity for two lenders at the center of a corruption scandal as investors again sold battered bank stocks.
“We are ready to guarantee that these banks have and will maintain liquidity,” Governor Adam Glapinski said on Monday. “Their clients are safe.”
He spoke after the country’s Financial Stability Committee (KSF) met and vowed to step in with “necessary actions to support banking-system stability.” The WIGBank index of listed lenders declined 1 percent by 11:23 am in Warsaw after a 4 percent slide, the biggest daily descent in more than two years. The benchmark WIG20 index dropped 0.4 percent.
Poland’s nationalist government and its allies in the central bank are struggling to contain the scandal, which broke last week when a newspaper published transcripts of recordings suggesting that the financial regulator solicited a bribe from Leszek Czarnecki, the owner of Getin Noble Bank SA and Idea Bank SA. While the watchdog quit immediately, it’s unclear who else may have been involved. In an editorial on Monday, the country’s financial broadsheet Rzeczpospolita called for Glapinski to resign over the scandal. The governor himself went on the offensive, accusing Czarnecki of trying to “destabilise” the country’s banking industry.
Shares in Getin Noble dropped 12 percent to a record low of 0.29 zloty as of 11:04 am in Warsaw, while Idea Bank was little changed. Both lenders, which are among the least capitalised among listed Polish banks, rely on short-term retail deposits for funding.
“Some worrying information emerged about the possibility of financial problems and potential problems for clients of the banks which Czarnecki co-owns,” Michal Dworczyk, head of the prime minister’s chancellery, told Polsat News on Monday. He added the KSF’s meeting was a sign that things are working well in the country and that the financial system is stable. Czarnecki, who is testifying in the bribery case, told reporters that he hopes that the prosecutor will “thoroughly investigate the matter and find all people linked to it.” The KSF is chaired by country’s finance minister, central bank governor, chief financial regulator and head of the Bank Guarantee Fund.