On Monday, the European Commission approved a Polish scheme "aimed at maintaining stability in the Polish financial sector by underwriting capital increases to eligible financial institutions." The scheme complements an arrangement intended to stabilize the Polish financial system that was approved by the Commission in September.
Under the scheme, which is open to all Polish banks and insurance companies, Poland offers to "underwrite, in the form of preferential shares or subordinated debt instruments, up to 100% of capital increases of financial institutions that are unable to obtain the required financing from the market." The Commission found that the scheme abided by its recapitalization guidelines. In May, the IMF approved a one-year $20.58 billion Precautionary Credit Line Arrangement for Poland, under its Flexible Credit Line, at the request of the Polish government.