UKNF Supervisory Blog - Komisja Nadzoru Finansowego
COMMUNICATION
UKNF Supervisory Blog
Number of results found: 9
MREL: a blessing or a curse?
Prepared by: Ewa Przedpełska, Expert in the Commercial Banking Department, UKNF
The experiences from the financial crisis in 2008–2010 have shown that for the financial system it’s better to restructure (even through compulsory restructuring) big banks that have found themselves in a crisis than to allow them to fail. However, under market economy and to prevent moral hazard, this shouldn’t be done at the expense of tax payers’ money, managed by state governments, just as it happened as a result of the crisis.
19 December 2023
The functioning of banks and climate change
Prepared by: UKNF, Commercial Banking Department
In August 2023, Science magazine published an article1 which quoted research results showing that about 930 thousand years ago almost 99% of our ancestors’ population had died due to climate changes that took place in Africa. The changes involved cold wave and drought. The authors estimate that for about 120 thousand years, the population of our ancestors was only around 1 300. This shows clearly that climate change affects not only human life but also our existence and survival as a biological species.
21 August 2023
Banking regulations versus digital transformation of financial markets
Emil Radziszewski, Managing Director of the Banking Supervision Division
The first steam engines were built at the turn of the 17th and 18th centuries as steam-powered water pumps for draining mines. Over the next 200 years, the steam engine technology enabled the energy from carbon and water to be put not only into pumps but also weaving machines, trains, huge transatlantic liners, and power stations. The Industrial Revolution, initiated by the steam engine, transformed the economy which was based on muscle strength and metabolism of food products into the economy based on a more efficient combustion of hydrocarbons or nuclear reaction. Such transformation enabled not only efficient extraction of water from mines but also space flights.
18 August 2023
Interest rate risk in mortgage loans in Poland: lessons learned
Kamil Liberadzki, Director of the Regulation Development Department
I. Interest rate risk: anticipating the future and relying on the collective wisdom of the internet
Have you ever watched smoke dissipate into the air in a perfectly still weather? What do the movement of particles of such smoke and the movements of the floating-interest rate on mortgage loans have in common? Well, banks price contracts based on interest rate using dynamics models that are almost identical to the ones used by physicists to model the movement of smoke dissipating into a still environment. Each single smoke particle bombarded with billions of air particles undergoes diffusion as described by the random walk model. The same rule applies to the market interest rate ‘driven’ by decisions, usually made independently by hundreds of thousands of money market participants.
11 August 2023