Polish Covered Bonds
Poland Issuers - Legislation
| 1 | Who is the issuer? |
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| Comments: Apart from the mortgage banks, also 1 state bank (Bank Gospodarstwa Krajowego) is allowed to issue covered bonds in Poland. |
| 2 | Does the bondholder have recourse to the credit institution? |
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| 3 | Who owns the cover assets? |
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| 4 | Is the issuer the originator of the assets? |
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| 1 | Are the bonds governed by a special covered bond Legislation? |
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| 2 | What is the legal framework for bankruptcy of the issuer of covered bonds? |
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| 1 | What types of assets may be included in cover pools? |
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| 2 | What is the geographical scope for public sector assets? |
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| Comments: Domestic assets for municipalities loans (Polish Covered Bond and Mortgage Banks Act, Art.3 para 4). Polish Covered Bond and Mortgage Banks Act, Ariticle 3. para 2. A public mortgage bond is a registered or bearer security issued on the basis of receivables of a mortgage bank arising from: 1) credits within the secured part with due interest, a guarantee or surety of the National Bank of Poland, the European Central Bank, governments or central banks of the EU Member States, the Organisation for Economic Cooperation and Development, except for states which are currently in the process of restructuring of restructured their foreign debts during the last 5 years, as well as a guarantee or surety of the State Treasury in accordance with provisions of separate laws; or 2) credits granted to entities listed in point 1); or 3) credits in the secured part with due interest, a guarantee or surety of local government units and credits granted to such local government units. |
| 3 | What is the geographical scope for mortgage assets? |
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| 4 | Are regular covered bond specific disclosure requirements to the public mandatory? |
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| Comments: Based on Art. 26 of the Polish Covered Bond and Mortgage Banks Act and various obligations from the Trading in financial instruments act. |
| 1 | LTV is calculated using which valuation?[4] |
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| 2 | Are there any special LTV limits used solely for calculating collateralisation rates for the cover pool (if yes, specify)? |
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| 3 | Do bondholders get the benefit of that portion of the loan which exceeds the LTV cap? |
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| 4a | Is there an LTV cap which makes the entire loan ineligible to be put in the cover pool (if yes, specify)? |
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| Comments: 100% LTV cap for both residential and commercial loans. This cap referes not only to cover pool ineligibility, it is a general cap (total LTV cap) - Art. 13 para 2. of the Polish Covered Bond and Mortgage Banks Act. |
| 4b | Is there an LTV cap which would require a loan to be removed from the cover pool? |
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| 5 | Is there any additional LTV limit on a portfolio basis? |
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| Exposure to market risk |
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| 1 | Is exposure to market risk (e.g. interest rate, currency risks) required to be mitigated by law or contract? |
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| Comments: Only currency risk is required to be mitigated by law. |
| 2 | What is the primary method for the mitigation of market risk? |
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| Comments: In particular, Interest Rate Swaps (IRS) and Cross-Currency Interest Rate Swaps (CIRS). |
| 3 | If the answer to the above question on market risk mitigation is “Use of derivative hedge instruments”, please specify whether those instruments are entered into: |
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| 4 | What type of coverage test is applied? |
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| Comments: There are two coverage tests: one on a semi-annual basis verifying relation of nominal values of cover pool, liquidity buffer to covered bonds and liquidation costs, second test on a daily basis verifying relation of nominal values of cover pool to covered bonds, relation of cover pool interest to covered bonds interest and level of liquidity buffer. |
| 5 | What is the frequency of coverage calculations? |
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| 6 | What types of stress scenarios are applied? |
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| 7 | What is the frequency of stress test calculations? |
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| Exposure to liquidity risk |
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| 8 | Is exposure to liquidity risk required to be mitigated by law or contract? |
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| 9 | What is the primary method for the mitigation of liquidity risk on interest payments? |
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| 10 | What is the primary method for the mitigation of liquidity risk on principal payments? |
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| 11 | Is there any grace period in case of a breach of liquidity risk mitigants? |
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| 12 | What is the consequence of not fixing a breach of liquidity risk mitigants? |
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| Monitoring of exposures to market and liquidity risk |
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| 13 | Who monitors the maintenance of coverage tests? |
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| 14 | Are there any regular public reporting requirements for market and liquidity risk? |
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| Overcollateralisation |
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| 15 | Is mandatory minimum overcollateralisation required? |
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| 16 | What is the level of minimum mandatory overcollateralisation? |
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| 17 | If mandatory overcollateralisation is required, are the amounts above the minimum OC level protected? |
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| 18 | Is there any grace period in case of a breach of the coverage test? |
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| 19 | What is the consequence of not fixing a breach of the coverage test? |
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| 1 | Is a special license required for the issuing of covered bonds? |
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| 2 | Are there special reporting duties of the covered bond issuer to the supervision authority concerning covered bonds and the cover pool, which go beyond the regular banking supervision? |
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| 3 | What is the role of the banking supervision regarding covered bonds? |
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| 4 | Is there a special role of banking supervision in crisis regarding covered bonds? |
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| 5 | Is there a cover pool monitor independent from the issuer? |
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| 6 | If there is an independent cover pool monitor, what are its duties? |
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| 1 | Do covered bonds automatically accelerate when the credit institution goes insolvent? |
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| 2 | What is the cover pool? |
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| 3 | How are the covered bondholders protected against claims from other creditors in case of insolvency of the issuer? |
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| 4 | Is there recourse to the credit institution’s insolvency estate upon a cover pool default? |
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| 5 | Are there provisions that require derivatives to continue in case of insolvency of the credit institution? |
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| 6 | If derivatives are permitted in the cover pool, what is their ranking? |
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| 1 | Does the covered bond fulfil the criteria of UCITS 52(4)? |
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| 2 | For further information regarding the compliance to the criteria of Article 129 of the Capital Requirements Regulation (CRR), please see the following links: http://ecbc.hypo.org/Content/default.asp?PageID=504#position https://www.coveredbondlabel.com |
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| 3 | Are listed covered bonds eligible in repo transactions with the national central bank? |
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| 4 | Are there any special investment regulations regarding covered bonds? |
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| 1 | Link to National Association representing covered bond interests |
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| 2 | Link to national regulators and supervisors |
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| 3 | Fact Book Country Chapter |
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| 4 | Hypostat Country Chapter |
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