The financial burden of the SKOK system in Poland

28 Jul 2015 / #1

"More than PLN 3 billion (about EUR 700 million) has been paid out to people who have made deposits and put their trust in these institutions," Kopacz told reporters.

The SKOKs have run into financial trouble and been heavily criticised for weak management and poor supervision.

Reportedly almost half of the 55 credit unions are close to bankruptcy, putting a strain on the banking bailout fund.

thenews.pl/1/12/Artykul/215245,PM-Kopacz-becries-SKOK-burden

Absolutely ridiculous. According to the article, they account for only 1.1% of banking sector assets, yet 3 billion złoty has been spent on rescuing them.

They should be subject to exactly the same rules as other banks within the EU. Certainly, if "Polish Banks for Poland" is what's wanted, who will pay for their financial incompetence and mismanagement?

Dougpol1 29 | 2497

28 Jul 2015 / #2

They should be subject to exactly the same rules as other banks within the EU.

I don't know about their banking competence, but I used to hold training courses in a couple of their institutions, and I would like to say that it couldn't have happened to nicer people.

But they were so up their own arses that I can't :)

jon357 73 | 23224

28 Jul 2015 / #3

Things like SKOK (and a few other smaller institutions, Cepelia comes to mind) is in a sense a Spolka Nomenklatura, basically a self-preserving institution that tried to make the transition from the PRL years with as minimum effort as possible, as much advantage to the people who run it as possible and frankly a great deal of arrogance.

If the SKOK system modelled itself on the way Credit Unions work in the UK, it would be a huge success.

They won't of course, the slimmed down structure, the accountability, the transparency and the democratic control by the members would make them melt down in shock.

cms 9 | 1253

28 Jul 2015 / #4

I don't think its a Polish problem alone - the mutuals and mom and pop savings banks have got in trouble all over the developed world - Caixa in Spain, some of the Sparkasse in Germany and Austria, the Food Co-op bank in Britain and of course the US is the daddy with the MSB crisis in the 80s. The model doesn't really fit into modern capitalism any more buy I don't think its as simple as letting them go bust - it would hit small town Poland hard - might only be 1% of assets that's still a lot of marginal wealth and of course there are thousands of people employed there.

What I do think was bad was the way the PO govt made Pekao etc prop them up, still acting as though those banks were govt property when in fact they now have mostly private shareholders.