ESRB European Systemic Risk Board : Notification by Komisja Nadzoru Finansowego (Polish Financial Supervision Authority) on 12 other systemically important institution (O-SIIs)

Notification template for Article 131 CRD - Other Systemically Important Institutions (O-SII)1

Please send this template to

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[e-mail] when notifying the ESRB;[e-mail] when notifying the ECB;[e-mail] when notifying the EBA.

1. Notifying national authority
1.1 Name of the notifying authority	Komisja Nadzoru Finansowego (KNF)
Description of the measure
2.1 Concerned institution or group of institutions	O-SII LEI Code Level of consolidation PKO BP S.A. mBank S.A. P4GTT6GF1W40CVIMFR43 259400DZXF7UJKK2AY35 BANK ZACHODNI WBK SA BANK POLSKA KASA OPIEKI SA ING BANK ŚLĄSKI SA 259400LGXW3K0GDAG361 5493000LKS7B3UTF7H35 259400YLRTOBISHBVX41 BANK HANDLOWY W WARSZAWIE BANK BGŻ BNP PARIBAS SA DEUTSCHE BANK POLSKA SA GETIN NOBLE BANK SA BANK MILLENNIUM SA XLEZHWWOI4HFQDGL4793 NMH2KF074RKAGTH4CM63 529900CFOWM2V62I4634 2594000SEGUR418W2G08 259400OFDZ9KPZEO8K78 BANK POLSKIEJ SPÓŁDZIELCZOŚCI SA SGB-BANK SA BB3BGO3LCED63R8R9R41 259400P9KF07OP2K5P83 consolidated and individual level consolidated and individual level consolidated and individual level consolidated and individual level consolidated and individual level consolidated and individual level consolidated and individual level consolidated and individual level consolidated and individual level consolidated and individual level consolidated and individual level individual level
2.2 Level of the buffer applied	O-SII Buffor rate applied PKO BP S.A. mBank S.A. 0.75% 0.75% BANK ZACHODNI WBK SA BANK POLSKA KASA OPIEKI SA ING BANK ŚLĄSKI SA 0.5% 0.5% 0.5% BANK HANDLOWY W WARSZAWIE SA BANK BGŻ BNP PARIBAS SA DEUTSCHE BANK POLSKA SA GETIN NOBLE BANK SA BANK MILLENNIUM SA 0.25% 0.25% 0.25% 0.25% 0.25% BANK POLSKIEJ SPÓŁDZIELCZOŚCI SA SGB-BANK SA 0% 0%

1 To be filled in and submitted for each O-SII.

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2.3 Name of the EU ultimate parent institution	O-SII EU Parent LEI Code (EU parent) mBank S.A. BANK ZACHODNI WBK SA ING BANK ŚLĄSKI SA BANK BGŻ BNP PARIBAS SA DEUTSCHE BANK POLSKA SA BANK MILLENNIUM SACommerzbank AG Banco Santander S.A. 851WYGNLUQLFZBSYGB56 5493006QMFDDMYWIAM13 ING Bank N.V. 3TK20IVIUJ8J3ZU0QE75 BNP PARIBAS Deutsche Bank AG Banco Comercial Português S.A. R0MUWSFPU8MPRO8K5P83 7LTWFZYICNSX8D621K86 JU1U6S0DG9YLT7N8ZV32
2.4 Names of subsidiaries	N.a.
Timing of the measure
3.1 Timing of the Decision	The KNF issued the decision on 19 December 2017.
3.2 Timing of the Publication	The press release after the KNF meeting was published on 19 December 2017 on the KNF website. A few days later the decision was handed over to the Bank.
3.3 Disclosure	The information has been disclosed on the KNF website (www.knf.gov.pl) in the following way: as a press release, as a briefing note.
3.4 Timing of Application	The date of application is 31 December 2017.
3.5 Phasing in	The measure will be fully applied from 31 December 2017.
3.6 Review of the measure	Annually
Reason for activation of the O-SII buffer
4.1 Scores of concerned institution or group of institutions, as per EBA guidelines on the assessment of O-SIIs	institution connectedness PKO BP S.A. mBank S.A. 1817 1518 476 1655 1 367 859 1026 1177 1344 1 102 BANK ZACHODNI WBK SA BANK POLSKA KASA OPIEKI SA ING BANK ŚLĄSKI SA 964 806 1287 1085 1 035 1119 1161 944 900 1 031 755 813 1205 583 839 BANK HANDLOWY W WARSZAWIE BANK BGŻ BNP PARIBAS SA DEUTSCHE BANK POLSKA SA GETIN NOBLE BANK SA BANK MILLENNIUM SA 291 628 821 335 519 464 418 470 341 424 255 348 615 421 410 432 348 312 357 362 442 444 290 272 362 BANK POLSKIEJ SPÓŁDZIELCZOŚCI SGB-BANK SA 343 317 14 276 237 277 212 2 86 144 * (including substitutability/ financial system infrastructure)

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4.2 Methodology and indicators used for designation of the O-SII (Article 131.3)	The KNF followed the EBA guidelines. All the relevant criteria, indicators and weights have been applied. Where the data were not available at the highest level of consolidation under the KNF jurisdiction, relevant proxies have been used. The threshold has been set at 350 basis points (bps). All banks falling within the scope of definition of 'institutions' laid down in Article 4 (3) of the CRR have been included in the calculations and investment firms have been excluded.
4.3 Supervisory judgement	The following optional indicator was used to designate two institutions (Bank Polskiej Spółdzielczości SA and SGB-Bank SA):  Importance for an IPS of which the entity is a member. Each of the two banks plays a key role the in one of the two Institutional Protection Schemes operating in the Polish banking sector. Each of the two banks has been obliged to:  run selected deposit accounts on behalf of the co-operative banks that are united within its IPS,  monitor certain categories of risk within its IPS,  provide technical infrastructure for its IPS.
4.4 Calibrating the O-SII buffer	The O-SII buffer was calibrated using a proportional method. For institutions scoring no less than 350 bps, the buffer rate was calibrated in the following stages:  rounding down the quotient of the score of the institution divided by 350 to the nearest integer, i.e. x = [score/350]  assigning of the integer from the previous step to the buffer rate proportionally by multiplying it by 0.25%, i.e. x*0.25%  if the value calculated in step 1 is equal or higher than 5, then the buffer rate is set at 2%. It should be emphasized that the application of the last stage of the above procedure abolishes the rule of proportionality in setting the O-SII buffer rate. When the size of an institution exceeds a certain threshold, the risk it generates to the financial sector and the real economy increases non-linearly. Such an institution should be subject to the maximum buffer, i.e. 2% of total risk exposure calculated in accordance with the CRR.
4.5 Effectiveness and proportionality of measure	Setting the O-SII buffer will have a positive impact on the resilience of the banks to external shocks, as well as on the overall soundness of the banking sector and the real economy in Poland. The applied measure is proportional with respect to the overall score of the bank and the level of concentration in the Polish banking sector.
Combinations and interactions with other measures
5.1 Assessment of cross-border effects and the likely impact on the internal market (Recommendat ion ESRB/2015/2)	The effects are negligible due to insignificant scale of cross-border activities of the banks.

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5.2 Assessment of leakages and regulatory arbitrage within the notifying Member State	The research carried out so far shows no signs of such effects.
Combinations and interactions with other measures
6.1 Combinations between G-SII and OSII buffers (Article 131.14)	There are no G-SIIs registered in Poland. At the same time some of the identified O-SII banks are subsidiaries of banks identified as either O-SII or G-SII.
6.2 Combinations with SRB buffers (Article 131.14 + Article 133.5)	As of 2017 the systemic risk buffer has not yet been set in Poland. However, the Financial Stability Committee recommended setting a systemic risk buffer of 3% applying to all exposures on the territory of the Republic of Poland. The recommendation was addressed to the minister competent for financial institutions (Minister of Development and Finance), who issued a relevant ordinance in September 2017. The systemic risk buffer will be fully applied from 1 January 2018. In accordance with art. 131.15 of CRD IV the buffer is applicable to all banks in the country on both individual and consolidated level. This means that banks identified as O-SII shall comply with the sum of the two buffer requirements.
6.3 O-SII requirement for a subsidiary (Article 131.8)	O-SII	EU Parent	O-SII Buffer Rate (EU Parent)	G-SII Buffer Rate (EU Parent)
	mBank S.A.	Commerzbank AG	1.5%	none
	BANK ZACHODNI WBK SA	Banco Santander S.A.	1,00%	1,00%
	ING BANK ŚLĄSKI SA	ING Bank N.V.	2,00%	1,00%
	BANK BGŻ BNP PARIBAS SA	BNP PARIBAS	1.5%	1.5%
	DEUTSCHE BANK POLSKA SA	Deutsche Bank AG	2,00%	2,00%
	BANK MILLENNIUM SA	Banco Comercial Português	0.75%	none
6.4 Interaction with other measures	N.a.
Miscellaneous
7.1 Contact person(s) at notifying authority	Michał Kruszka,[e-mail], [phone] Szymon Janiszewski,[e-mail], [phone]
7.2 Any other relevant information	-

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