Changes in the Financing Structure of the Real Economy in Poland - Challenges for the Banking Sector
The banking system in emerging economies: how much progress has been made?, BIS Papers No 28, August 2006
13 Pages Posted: 11 Nov 2013
Date Written: August 1, 2006
Significant changes have occurred in the Polish banking sector over the last ten years. In the mid-1990s, due to low market entry requirements, many small private commercial banks, which were frequently established by foreign banks seeking to enter the Polish market, operated alongside state banks. A wave of privatisation occurred in the banking sector, which was followed by a period of consolidation and restructuring. These processes, coupled with a simultaneous increase in foreign investor participation, enhanced management quality and banks’ efficiency, primarily with regard to risk management.
The changes, which took place in the Polish banking sector in the second half of the 1990s, improved access to loans for corporates and households alike. As a result, lending grew rapidly. The increase was, on average, more pronounced in the household sector than in the corporate one, which brought the composition of bank loans to the private sector closer to what exists in the European Union. This convergence has accelerated over the last five years. The purpose of this paper is to present the phenomena which influenced the evolution of debt structure of the real economy sector in Poland as well as to discuss related future challenges.
Keywords: Banking Sector in Poland, Economic Transformation, Credit growth, Lending policy
JEL Classification: G2, O16, O52
Suggested Citation: Suggested Citation