Łukasz Hardt, Adviser to the Chair of the KNF

One of the tasks of the KNF expressly defined in the Act on financial market supervision is to take actions for the development of that market. It is about both stimulating its growth and taking care of its competitiveness and stability – all that being done so that the financial market can support the development of Poland’s economy. Higher competitiveness of the economy is determined by higher labour productivity rates, and these depend on capital accumulation rate (capital deepening), in other words – the level of investment. At the same time, a material rise in investment-to-GDP ratio (capital deepening) requires appropriate funding sources, i.e. a deeper financial market (financial deepening). This happens, since a developed financial market mobilises savings, which in turn increases the supply of funds for investment purposes, reduces the costs of capital through competition and better risk valuation, improves capital allocation and allows long-term funding.

What is the size of the financial market in Poland? This is usually measured as a relation of the assets of the national financial system to GDP; in Poland, it was 122.4 per cent in 2024. This is less than the euro zone average (477.8 per cent), but also less than in the Czech Republic (164 per cent), Slovakia (131.6 per cent) and Hungary (139.7 per cent)¹.

One  of the main causes of the relatively small size of the financial market in Poland is low saving rate (7.77 per cent in 2024; 14.47 per cent on average in the EU) and the fact that Polish households keep an essential part of their assets in real property. We must not forget that – especially as compared to other countries such as France or Germany – we have been building the financial market in Poland only since 1989. 

Now, let’s look at the level of investment in Poland’s economy. In 2024, the total investment rate was 16.9 per cent in Poland , and 21.2 per cent on average in the EU. This is a permanent phenomenon: only in 2009 and 2014, investment rates in Poland were for a little while higher than the EU average; it has usually been lower, but for several years now the gap has been widening. Moreover, the investment rate for private enterprises in Poland was 9.1 per cent in 2023, being one of the lowest in the EU. For example, it was 15.8 per cent in the Czech Republic, and 16.9 per cent in Sweden. On the other hand, the rate of public investments in 2023 in Poland was higher than the average EU rate. Given the volume limitations, this article cannot get into more detail on this, but the relevant literature suggests that the actual investment rate in Poland could be slightly higher than as reported by Statistics Poland (GUS). One of the reasons could be that Poland’s economy has a different structure: if the structure were as in the EU on average, the investment rate in Poland would be even 1.5 percentage point higher². 

According to a 2025 report by the Polish Economic Institute, Investment activity of Polish businesses: scale and barriers, the main drive for businesses in Poland to undertake investments is the adaptation to customer needs, but the effort to improve employees’ performance is also a relevant factor³. The major barriers to investments include: high level of uncertainty, costs of investment funding, and energy carrier prices. At the same time, from the macroeconomic point of view, considering the rising unit costs of labour, one can expect a higher percentage of businesses that will want to substitute labour with capital, which could lead to increased demand for funding supplied from the financial system.

The UKNF promotes the development of the financial market with, among others: efforts to reduce legal risk in bank activities, support for the introduction of new products, recommendations on how to boost the economy financing capacity of the sector entities, as well as ongoing supervisory and inspection activities. The UKNF has recently collaborated with the Ministry of Finance and Development  in the area of consultations on initiatives for the development of the capital market, and with market participants in regard to their deregulation proposals. The UKNF is staying current with the latest trends in market development, e.g. the growing popularity of crypto-assets, in order to detect sources of potential instability in advance, propose remedial measures, but also to support the trends that can be beneficial to the market. 

On a final note, I should add that thanks to the UKNF’s efforts mentioned above, the size of the financial market in Poland can be increased without compromising its security and stability. This does not mean that the risk is to be eliminated from the market – on the contrary, speaking in a slightly provocative tone, Poland does need more risk in the financial market. The goal is not to encourage speculation or irresponsibility, but to help financial institutions be better prepared to assume reasonable, calculated investment risk. Polish economy – facing the challenge of shrinking labour resources – needs more high-risk capital, including capital employed in the private capital market, and more loans for businesses on banks’ balance sheets on the banks’ side. 

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¹See: NBP (2025), " Rozwój systemu finansowego w Polsce w 2024 r.” [Financial system in Poland 2024 ], https://nbp.pl/system-finansowy/raporty-o-rozwoju-systemu-finansowego/
²Growiec J., Mućk J. (2018), "Długookresowe spojrzenie na stopę inwestycji w Polsce” [Long-term look at investment rate in Poland], Obserwator Finansowy, https://www.obserwatorfinansowy.pl/bez-kategorii/rotator/dlugookresowe-spojrzenie-na-stope-inwestycji-w-polsce/
³The report is available on the PIE institute’s website: https://pie.net.pl/wp-content/uploads/2025/06/PIE_raport_Aktywnosc-inwestycyjna-polskich-firm.pdf