Polish bank watchdog resigns after report of $10 million bribe

Bloomberg

Poland’s financial industry regulator quit after a newspaper reported that he made an improper offer to the owner of a troubled bank, triggering a government investigation.
Financial Supervision Authority Chairman Marek Chrzanowski said allegations by Gazeta Wyborcza were a “dishonest and groundless” provocation, but that he must resign to ensure stability in the banking industry, he told Poland’s PAP news agency.
“For the good of the state, I resign,” Chrzanowski said. Earlier, the watchdog rejected as “untrue” Wyborcza’s report that he suggested to Leszek Czarnecki, the owner of Getin Noble Bank SA, how he could get favorable treatment from the regulator if he hired a specific lawyer.
Prime Minister Mateusz Morawiecki “called the regulator for explanation and ordered the prosecutor’s office to collect information immediately,” Mic-hal Dworczyk, the head of the premier’s chancellery, told private radio station RMF FM. The biggest opposition party called for a parliamentary investigation into the “corruption.”
However it plays out, the affair has highlighted an ongoing row between the government and central bank over who should ultimately regulate the financial industry. Poland’s nationalist ruling party has been tightening its grip on the country, appointing its own people to the courts, public media and state-run companies. Oversight of the Financial Supervision Authority is currently shared between politicians and officials from the central bank.
Central bank Governor Adam Glapinski is a close colleague of Chrzanowski and has for years sought to wrest control over banking supervision, arguing it would better protect the stability of the industry. Morawiecki, a former chief executive of one of Poland’s biggest banks, has proposed to strengthen the government’s role.
Citing transcripts from recordings made by Czarnecki as well as comments by his legal adviser, the newspaper said Chrzanowski suggested that Getin hire a lawyer whose fee should be the equivalent of 1 percent of the bank’s market capitalisation. Wyborcza put the figure at 40 million zloty ($10.5 million) on its front page.
The regulator, known as KNF in Polish, said in a statement that it recommended the name of a lawyer to Czarnecki, though denied making any specific proposals regarding fees or promising any special treatment.