Agreement between the National Bank of Poland and Banque de France
12 July 2001
Insofar cooperation of the National Bank of Poland with Banque de France
The cooperation of the NBP with Banque de France started in 1998 when, within the contract financed by the European Union, the French experts performed a systemic analysis of the economic, legal, organizational and technological conditions of the NBP activity and their influence on the integration processes. Moreover, the NBP activity in the light of processes of adjustment to the EU requirements was subject to the analysis as well. As a result of the undertaken actions, Banque de France submitted the Management Board of the NBP its findings (the so-called policy recommendations) related to further necessary integration efforts by the NBP. On the basis of the above-mentioned findings and due to a developing cooperation with Banque de France, the Management Board of the NBP made a decision to participate in Phare 2000 programming financed with resources of the European Union.
Reasons for selecting Banque de France as a twinning cooperation partner; syndicate of banks
As a result of the undertaken actions, a project entitled "Adjustment of the National Bank of Poland to operation within the European System of Central Banks" was developed. Considering the experience of Banque de France, especially in the area of banking supervision and bank regulations, monetary statistics, accounting and payment systems, a natural partner of the NBP in the planned adjustments became Banque de France. It undertook to accomplish the project of the NBP together with the central bank of Italy, this way creating the bank syndicate.
Very important was also the fact that Banque de France as a leading bank participated in the accomplishment of the syndicate agreement with Bank of Rumania, within the framework of Phare 1998, and positive practical experiences that resulted from this cooperation. The participation of Banca d'Italia was very desirable due to a high professionalism and big experience of this bank, inter alia, in the area of IT techniques. The program will be financed with the aid resources Phare 2000 of the European Union and co-financed by the National Bank of Poland. The agreement signed on July 12th this year is a twinning agreement concluded between the NBP and Banque de France representing the syndicate.
Main objective of the project
The objective of the project is the NBP full adjustment of to the requirements put to the members of the European System of Central Banks. The NBP membership in the ESCB will start automatically after Poland becomes a member of the European Union. The accomplishment of the program will also enable Poland to meet the obligations accepted during accession negotiations in the areas within the competence of the NBP: "Economic and monetary union", "Free movement of capital", "Free provision of services", "Consumer protection and healthcare", "Statistics" and "Finance and budget".
Detailed objectives of the project
The project provides for the adjustment of the NBP activities to the EU standards in the following areas of the central bank activities:
- payment systems - Banque de France
- monetary statistics - Banque de France
- capital movement monitoring - Banca d'Italia
- accounting and reporting - Banque de France
- banking supervision - Banque de France, Banca d'Italia
- internal audit - Banca d'Italia
- IT system - Banca d'Italia
The NBP project provides for the accomplishment of adjustment actions in seven components:
Component 1 - Payment systems
It will enable the adjustment of the Polish payment system SORBNET that is the RTGS system (Real Time Gross Settlement) to the European Union standards and the ECB requirements through entering the EU system TARGET (Trans-European Automated Real Time Gross Settlement Express Transfer System).
Component 2 - Monetary statistics
It is aimed at the adjustment of the NBP monetary policy to the requirements of the European Central Bank by implementing EU solutions mainly related to the preparation of a consolidated balance sheet of the Monetary Financial Institutions, sectoring, preparing transaction statistics, the scope of the collected data and the method of weighting within the area of interest rate statistics. Moreover, it will enable the establishment of the base for the statistics of securities issuing.
Component 3 - Monitoring capital movements related to portfolio investments
It will improve the methodology of collecting and processing of the data related to cross-border portfolio transactions, including also short-term transactions due to the liberalization of the short-term capital. It will enable faster setting of the so-called external investment position.
Component 4 - Accounting and reporting
The accomplishment of this component guarantees the adjustment of the NBP accounting and reporting to the international and European Union standards. There will be developed the internal regulations of the NBP that are consistent with the ESCB recommendations. As a result, the NBP will be prepared to send every day the so-called "Daily report of turnover and statement" to the ECB starting as of January 1st, 2003.
Component 5 - Banking supervision
It will enable the introduction of the European Commission directives in the area of consolidated supervision and capital adequacy for the trading activities into the Polish laws, together with their full implementation and the improvement of the NBP tools that are necessary to evaluate the situation of individual banks.
Component 6 - Internal audit and controls
It will enable the modernization and adjustment of the NBP internal audit to the European audit standards. It will be achieved through the improvement of types and methods of the NBP internal audit and through the adequate training of the NBP staff.
Component 7 - IT system
It is to ensure a reliable level of service continuity of the NBP IT system that could be comparable to systems existing in the European System of Central Banks (ESCB).
This way, professional skills of the NBP employees involved with the adjustment process will be considerably higher.
Forms of the project accomplishment
- study visits of the NBP employees to Banque de France and Banca d'Italia,
- domestic training,
- quarterly reports and a final report evaluating the adjustment of the NBP to the ESCB standards.
Timeframe of the project accomplishment
The project will last 24 months. The project is planned to be accomplished in June 2003.
In every project of the twinning agreement, a full-time expert from the member country will participate, who is called the Pre-accession Adviser and who will work in the country of the beneficiary and assist in coordination of particular actions.
The Pre-accession Adviser is responsible for advising in such areas as organization, human resources management, observing procedure principles, and introduction of activity monitoring and information exchange systems. The Pre-accession Adviser will assist the NBP and the Syndicate Project Manager in evaluating and organizing missions on the spot and seminars and training. He/she will be also responsible for the assessment of results and ensuring the smooth accomplishment of the project, he will suggest necessary changes after consultation with the NBP and Banque de France.
The total amount of the project is EUR 6 485 000, where:
- share of Phare (twinning agreement budget) -
EUR 2 000 185 according to the Financial Memorandum,
- equipment purchase (financed by Phare) -
EUR 1 495 000,
- co-financing by the NBP -
EUR 2 990 000.
The agreement will become effective after it is initialed by the Representative Office of the European Commission in Warsaw.