Should Polish banks be domesticated

Abstract

For many years now we have seen the process of introducing EU regulations aimed at integrating the banking systems of the Member States. Now, the work which was undertaken because of the recent financial crisis with a view to enhancing the banks’ safety is coming to an end. Polish banks are members of international capital groups as subsidiaries and this fact gives rise to problems resulting from the centralization of capital and liquidity management at the level of the group as well as the centralization of supervision in the European Union. The recent financial crisis has highlighted these issues and sparked a debate concerning the fact that most Polish banks are dependent on their foreign headquarters. The question is whether the current ownership structure of banks operating in Poland is beneficial for the Polish economy and whether there is an alternative solution to this situation. The ownership structure of these banks has lately been questioned. There are many arguments in favour of making these banks independent rather than subsidiaries of other banks. This alternative is known as bank domestication. Re-Polonization of banks is also discussed. The domestication of banks is understood as the process by which the share of locally controlled and managed banks in the assets of the banking sector will increase.