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Financial supervision

On September 6 2006 Poland will adopt a new system of regulation of the financial market. According to the Polish Financial Supervision Act of July 21 2006, the supervision of the financial market will be exercised by a single authority, the Financial Supervision Commission (KNF). The KNF replaces existing bodies: the Insurance and Pension Funds Supervisory Commission, the Securities and Exchange Commission and the Banking Supervisory Commission. The KNF is a collegial body, with a chairman appointed by the prime minister for a five-year term of office. The KNF will be supervised by the prime minister, to whom its annual reports will be submitted.

The KNF will supervise banking, insurance, pension funds, capital markets, electronic currency and possible other fields if provided in other laws. So the KNF controls almost all aspects of Poland's financial market.

In this, Poland follows a recent global trend of consolidating financial supervision. According to the World Bank survey conducted in 2002, 46 countries have consolidated their financial supervision, driven by changes in national and global financial markets in recent years. The increased globalization, removal of market barriers, IT progress, and increase of competition result have blurred borders between financial sectors.

In theory, the new commission will be an independent authority exercising supervisory powers over the financial market in an autonomous way. But there is a proverb in Poland: "not all that glitters is gold". Despite a noble intention, the new regulation seems set to get rid of icons of the Polish financial market, in particular Leszek Balcerowicz – a renowned author of Poland's successful transformation from a socialist to a capitalist economy – presently a chairman of the Banking Supervisory Commission and as such a guardian of a true independence of the banking market.

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