March 19, 2020 / 10:23 AM / 10 days ago

Former Polish regulator urges guarantee fund to halt demands from banks

WARSAW, March 19 (Reuters) - The Polish Bank Guarantee Fund (BFG) should abstain from collecting mandatory payments from banks in order to help them strengthen their liquidity during the coronavirus epidemic, the fund’s former head said on Thursday.

The fund was set up to support stability in Poland’s financial system, by guaranteeing banks and credit unions deposits. It is responsible for resolutions for financial institutions at risk of bankruptcy.

“I don’t see reasons to not to put on hold collecting payments for the resolution fund and also other payments due in the following quarters,” Jerzy Pruski, who is now chief executive at Idea Bank, said during a conference call.

Idea Bank is offering six-month holidays on instalment payments from next week to clients in need due to the coronavirus outbreak. The bank has about 200,000 business client borrowers.

There are 305 people infected with coronavirus in Poland, a country of 38 million. Five people have died so far.

The Polish central bank plans to hold on Thursday its first auction in which it will offer to buy back treasury bonds from commercial banks.

“The fund is monitoring the situation closely and is analysing potential scenarios. We are working on a proposal for the banking sector,” BFG spokesman said in an emailed response to Reuters questions.

Last year the total amount of payments collected from Polish banks by the fund amounted to 2.791 billion zlotys ($659.34 million).

$1 = 4.2330 zlotys Reporting by Marcin Goclowskil; Editing by Edmund Blair

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