Kluza named chief of Poland's new KNF financial market regulator

Former minister of finance Stanislaw Kluza was on Friday named the head of Poland's controversial new commission designed to supervise the rapidly growing financial sector. Formally called the Commission for Financial Supervision (KNF), the institution took effect September 19, despite the objections of the opposition and concerns of the European Commission.

The brain-child of Poland's governing right-wing Law and Justice (PiS) party, the new KNF replaces several independent institutions which have regulated Poland's blossoming private banking, stock market and insurance sectors since the advent of capitalism in 1989.

In a move which has been condemned by international observers, the KNF has replaced the Polish Securities and Exchange Commission (KPWiG) and the Insurance and Pensions Supervisory Commission (KNUiFE).

On January 1, 2008 it is also due to take over supervision of the independent Banking Supervisory Committee (KNB) currently headed by Poland's internationally respected central bank (NBP) chief Leszek Balcerowicz.

Seven government-appointed officials will sit on the new KNF, including presidential and Finance Ministry representatives. The president of the National Bank of Poland (NBP) will also be a member.

Prior to taking up the post of KNF chief Friday, 34-year-old economist Kluza served a brief stint as Poland's finance minister in the right-wing Law and Justice (PiS) government of Prime Minister Jaroslaw Kaczynski.

Critics of the new KNF argue it will be subject to political cronyism and lack the healthy independence of the organizations it replaced.

NBP chief Balcerowicz has blasted the KNF as undermining the unbiased and independent supervision of Poland's financial sector.

Poland's Lewiatan Confederation of Private Employers has echoed his concern.

Objectors also note the centralization of power over Poland's banking, capital market and insurance sectors could prove very damaging.

The governing PiS and other supporters, however, argue similar centralized government agencies in Britain and the Netherlands are well-equipped to monitor the ever-more complex fusions of financial institutions in the era of globalization.
Source:/rawstory.com