Dilemma of institutional transformation of Polish cooperative bank sector in face of new prudential regulations for banks in Europe and economic results of cooperative banks in Poland

Abstract

New prudential regulations established for banks in Europe (directive 2013/36/UE - known also as CRD IV and regulation 575/2013 - CRR) do not take into account the specific legal situation of cooperative bank sectors in different countries in sufficient way. This situation is particularly uncom- fortable for sectors in those countries where associated cooperative banks are independent bodies with limited impact of associating bank on activity of associated banks. New prudential regulations oblige banks to change their internal structure and relationship. Additionally, the weaker economic results of cooperative banks in Poland in 2013 should be also an important driver of change. The main topic of the article is the presentation of different forms of possible institutional transformation in the Polish sector of cooperative banks and the analysis of advantages and disadvantages of each form of coopera- tion. The main solution can be an integrated model with weaker forms of cooperation or setting up the Institutional Protection Scheme model. Each of them generates important consequences for cooperative banks and for the associating bank. The biggest cooperative banks have also the third possibility - to act as fully independent institution, outside association with any bank. It is difficult to indicate one best solution for all banks, because the economic situation of banks is different and all national regulation concerning cooperative banks is not yet adopted.