E U R O P E A N F I N A N C I A L C O N G R E S S June 2014, Sopot

Transcription

1 E U R O P E A N F I N A N C I A L C O N G R E S S June 2014, Sopot

2 W E L C O M E T O T H E 4 T H E U R O P E A N F I N A N C I A L C O N G R E S S I N S O P O T For the fourth time, at the invitation of the organizers, representatives of the European and national regulatory and supervisory institutions, business, the academic world, politics and media meet in Sopot to identify risks and seek solutions to promote security, stability and integration of the European Union. To talk about good solutions for the joint success of Poland and the EU. Year 2014 is a special year for Poland. We have just celebrated 25 years since when we set off on our way to freedom, modernity, democracy and sovereignty. We feel safer because for 15 years we have been member of the Atlantic Alliance, and for 10 years one of the countries of the European Union. This year s event, however, takes place in a particular period of political and economic turmoil in Europe, which may prove to be a practical test of the European Solidarity. There has been an accumulation of risks related to energy security and financial safety, which awakened fears about the future. The risk for energy safety stems, among other things, from the Ukrainian crisis, and the risk to the financial security is the result of unfinished construction of the Banking Union, especially in terms of fiscal responsibility. The Polish point of view and Polish experiences and suggestions can be an inspiration to the process of further European integration and a new definition of security in the twenty-first century. The leading theme of this year s Congress is Financial Safety and Energy Security and the Integration of the European Union. The Congress program is co-created by the Programme Board, chaired by Jan Krzysztof Bielecki. It is supported by Steering Committees for each theme block and debate. The 4th European Financial Congress will be opened by a plenary debate which will try to find answers to questions like: Is it possible to further integrate the EU politically and to increase the competitiveness of the European economy without - ensuring financial safety? - ensuring energy security? - pro-innovation policy? In the second and third day of the Congress, we invite you to debates on the security of the financial system, sustainable financing of infrastructure development, development of the banking system, value-based management of strategic enterprises, challenges for the development of the capital market and the support for international business cooperation. The tradition and the achievement of the European Financial Congress are the Recommendations announced at the end of the session, which indicate practical solutions in areas most important for the joint development of the economy of the European Union and Poland. The Recommendations are developed pro bono, for the well and professionally understood benefit of Poland and Europe. Their implementation is supported by studies and media initiatives. The European Financial Congress is also an open project, which comprises public, pragmatic debates among representatives of business, politics and the academia. The debates are held at seminars and specialist congresses organized by the Gdaƒsk Institute for Market Economics Gdaƒsk Academy of Banking, as well as at sector-specific and thematic Steering Committees and Programme Boards meetings, which ensure a high level of competence and relevance of initiatives taken as part of the project. Be welcome to actively join the debates on good solutions for join security and prosperity of Poland and the EU. 2 3

3 Sheraton Sopot Hotel Floor 1 23 JUNE 2014 Room COLUMBUS Lunch Welcome speech OPENING ADDRESSES ROTUNDA level 0 stairs to ROTUNDA E wc elevator M A R C O P O L O F MULTIKINO Sopot (100m) IS IT POSSIBLE TO FURTHER INTEGRATE THE EU POLITICALLY AND TO INCREASE THE COMPETITIVENESS OF THE EUROPEAN ECONOMY WITHOUT ENSURING FINANCIAL SAFETY? Debate moderated by Jacek Rostowski, Deputy Prime Minister, Minister of Finance of Poland in the years Debate partner: PKO Bank Polski > page Break WITHOUT ENSURING ENERGY SECURITY? C O N G R E S S A G E N D A Terrace Level 0 Terrace Level 0 C C O L U M B U S A B D THE EU PERSPECTIVE Debate moderated by Janusz Lewandowski, European Commissioner for Financial Progamming and Budget Debate partner: PKN ORLEN S.A. > page THE POLISH PERSPECTIVE Debate moderated by Jan Krzysztof Bielecki, Chairman of the European Financial Congress Programme Board Debate partner: PGE Polska Grupa Energetyczna S.A. > page Gala dinner at the Sopot Forest Opera (transport to the Forest Opera at from the Sheraton Hotel) Partner: The City of Sopot > page 18 WITHOUT PRO-INNOVATION POLICY? Meeting with Professor Dan Breznitz, Munk School of Global Affairs, University of Toronto EUROPEAN FINANCIAL CONGRESS 5

4 24 JUNE 2014 Room COLUMBUS AB COLUMBUS CD MARCO POLO E MARCO POLO F ROTUNDA 24 JUNE 2014 Room COLUMBUS AB COLUMBUS CD MARCO POLO E MARCO POLO F ROTUNDA Infrastructure investments in Europe the role of the European Investment Bank Laszlo Baranyay, Vice-President European Investment Bank Debate Partner: PGE Polska Grupa Energetyczna SA > page Infrastructure and the growth of economy based on innovation Debate Partner: Baker & McKenzie > page Lunch Dilemmas of the European energy policy Debate Partner: Energa > page 51 Non-Euro countries in relation to the Banking Union Debate Partners: Polish Financial Supervision Authority, EY > page 29 Clients take over control in banks Debate Partner: IBM > page 32 Long-term incentives in motivating top management of enterprises Debate Partner: BCG > page The real crisis, the financial crisis and the rescue measures Hans-Werner Sinn, President of the Ifo Institute for Economic Research, Professor of Economics at the University of Munich > page 21 Macroeconomics of the infrastructure Debate Partner: NDI SA > page 46 Digital commerce trends, opportunities and threats for the banking industry Debate Partner: Accenture > page 23 Use of corporate governance in creating value of enterprises Debate Partner: PKP Cargo > page How to increase the attractiveness of the public market for issuers? Debate Partners: Warsaw Stock Exchange, Association of Listed Companies (SGE) > page Break The role of private capital in financing infrastructure Debate Partner: Bank Pekao S.A. >page 54 Development of mobile payments in Poland Debate Partners: PKO Bank Polski, KPMG > page 35 Whether and how to separate retail banking from investment banking in the EU? Debate Partner: Polish Financial Supervision Authority > page Break Foreign expansion of Polish resource companies an opportunity for Polish economy and science Debate Partners: KGHM Polska Miedê SA, PKN ORLEN S.A. > page 72 Legal relations between the State and the entrepreneurs forecasts for infrastructural investments in Poland > page 49 Banking habits of SMEs in Poland Results of research by Deloitte on bank clients in the SME sector Debate Partners: Deloitte, Bank Pekao S.A. > page How to increase the level of long-term domestic savings? Debate Partners: Warsaw Stock Exchange, Chamber of Commerce of Pension Funds > page 67 Model of financing key infrastructural projects Debate Partners: Bank Pekao S.A., Bank Gospodarstwa Krajowego, KPMG > page 56 When will ecommerce displace traditional business? Debate Partner: Bank Pocztowy > page 79 Asset Quality Review and what next? Debate Partners: Polish Financial Supervision Authority, Deloitte > page 40 MULTIKINO SOPOT, ROOM NO. 3 Miedê czy nie mieç, screening of a movie by Ewa Ewart Multikino Sopot, room no. 3 > page Departure of catamarans to Gdaƒsk from the Sopot Pier Break Gala dinner on the premises of the Gdaƒsk Shipyard

5 EUROPEAN FINANCIAL CONGRESS JUNE 2014, SOPOT 25 JUNE 2014 Room COLUMBUS AB COLUMBUS CD MARCO POLO E MARCO POLO F Recommendations for increasing the safety of the Polish banking system through the development of covered bonds market where are we? > page 43 Is the grey economy "in our blood" or will the business pay taxes if they are lowered? Debate Partner: Dziennik Gazeta Prawna > page 82 The role of economic diplomacy in the development of business cooperation Debate Partner: Warsaw Stock Exchange > page 84 Investment attractiveness of shale gas exploration and extraction in Poland Debate Partners: PGNiG, PAP > page 59 W E L C O M E S P E E C H : Jan Krzysztof Bielecki Chairman of the European Financial Congress Programme Board Coffee break Supporting business cooperation by financial institutions Debate Partner: EY > page Coffee break A C C O M P A N Y I N G E V E N T S : Immigration policy and the development of the modern business services sector Debate Partner: Infosys BPO Poland > page 89 EFC Academy > page 94 PPP in the development of cities and regions experience and prospects > page 96 Ownership strategy for the Warsaw Stock Exchange and its impact upon the safety and credibility of the capital market > page ANNOUNCING THE MOST IMPORTANT RECOMMENDATIONS OF THE EUROPEAN FINANCIAL CONGRESS Lunch BUSINESS DISCOVERIES IN AFRICA PRESENTATION OF THE ECONOMIC POTENTIAL AND THE INVESTMENT OFFER OF ETHIOPIA, GHANA, MOZAMBIQUE, SENEGAL AND OTHER COUNTRIES Security of the Polish natural gas market Debate Partner: Gas Transmission Operator GAZ-SYSTEM S.A. > page 62 O P E N I N G A D D R E S S E S : Włodzimierz Karpiƒski Minister of Treasury of Poland Dato' Seri Haji Ahmad Husni Bin Mohamad Hanadzlah Minister of Finance II of Malaysia Steffen Kampeter Parliamentary Secretary of State, Ministry of Finance, Germany Is it possible to further integrate the EU politically and to increase the competitiveness of the European economy without ensuring financial safety? Debate 23 June 2014, The Columbus Room I n t r o d u c t o r y s p e e c h e s : Yves Mersch Member of the Executive Board, European Central Bank Rolf Wenzel Governor, Council of Europe Development Bank András Simor Vice-President, European Bank for Reconstruction and Development EUROPEAN FINANCIAL CONGRESS 13

6 D e b a t e m o d e r a t O R : Jacek Rostowski Deputy Prime Minister and Minister of Finance of Poland in the years I n v i t e d p a r t i c i p a n t s : Danuta Hübner Member of the European Parliament Philippe Legrain principal advisor to Jose Manuel Barroso Paul Ormerod Partner, Volterra Hans-Werner Sinn President of the Ifo Institute for Economic Research Professor of Economics at the University of Munich S P E E C H : 23 June 2014, The Columbus Room The Banking Union from the perspective of an independent domestic bank Zbigniew Jagiełło President of the Management Board, PKO Bank Polski S.A. K E Y I S S U E S : Is the Banking Union an opportunity for a stronger political integration of the European Union or a risk of disintegration? Can the Banking Union reduce moral hazard in European banking or will it move it from the national to the European level? Whether and how to limit the excessive regulation of the financial system in the European Union? D E B A T E P A R T N E R : 14 EUROPEAN FINANCIAL CONGRESS EUROPEAN FINANCIAL CONGRESS 15

7 EUROPEAN FINANCIAL CONGRESS JUNE 2014, SOPOT Is it possible to further integrate the EU politically and to increase the competitiveness of the European economy without ensuring energy security? the European political perspective Debate 23 June 2014, The Columbus Room EUROPEAN FINANCIAL CONGRESS JUNE 2014, SOPOT Is it possible to further integrate the EU politically and to increase the competitiveness of the European economy without ensuring energy security? the domestic perspective Debate 23 June 2014, The Columbus Room D e b a t e m o d e r a t O R : I n t r o d u c t o r y s p e e c h a n d d e b a t e m o d e r a t i o n : Janusz Lewandowski European Commissioner for Financial Programming and Budget I n v i t e d p a r t i c i p a n t s : Joschka Fischer Vice-Chancellor and Minister of Foreign Affairs of Germany in the years Maria van der Hoeven Executive Director, International Energy Agency Günter Verheugen European Commissioner for Enlargement in the years and European Commissioner for Industry and Entrepreneurship in the years D E B A T E P A R T N E R : Jan Krzysztof Bielecki Chairman of the European Financial Congress Programme Board I n v i t e d p a r t i c i p a n t s : Jan Chadam President of the Management Board, Gas Transmission Operator GAZ-SYSTEM S.A. Jacek Krawiec President & Chief Executive Officer, PKN ORLEN S.A. Henryk Majchrzak President of the Management Board, PSE Marcin Moskalewicz President of the Management Board, PERN Przyjaêƒ SA Marek Woszczyk President of the Management Board, PGE Polska Grupa Energetyczna S.A. D E B A T E P A R T N E R : EUROPEAN FINANCIAL CONGRESS EUROPEAN FINANCIAL CONGRESS 16 17

8 EUROPEAN FINANCIAL CONGRESS JUNE 2014, SOPOT Gala dinner at the Sopot Forest Opera 23 June 2014, The Forest Opera Coaches to the Forest Opera from the Sheraton Hotel Welcome speech Jacek Karnowski President of the City of Sopot Dinner Is it possible to further integrate the EU politically and to increase the competitiveness of the European economy without pro-innovation policy? Meeting with Professor Dan Breznitz, Munk School of Global Affairs, University of Toronto Professor Dan Breznitz is a renowned authority on innovation policy and strategy; he was advisor to national and local governments; he is the author of numerous publications on innovation strategies and their impact on the growth and competitiveness of the economy. C o m m e n t A R Y : Jacek K dzior Managing Partner, EY Gra yna Piotrowska-Oliwa Vice-president, Employers of Poland This year s event takes place in a particular period of political and economic turmoil in Europe, which may prove to be a practical test of the European Solidarity. There has been an accumulation of risks related to energy security and financial safety, which awakened fears about the future. What about European integration? An evening at a former production hall of the Gdaƒsk Shipyard (now Club B90), among historic cranes, ramps and industrial facilities Departure of catamarans from the Sopot Pier Welcome Paweł Adamowicz, President of the City of Gdaƒsk Adam Maciejewski, President of the Management Board, Warsaw Stock Exchange Dinner The future of the European Union and the European economy. A discussion between Paul Ormerod and Jan Krzysztof Bielecki, led by Marek Orzechowski After the discussion, all Guests will be welcome to continue the conversation in an informal atmosphere. The meeting will also be led by Marek Orzechowski. Return to Sopot by coach. P A R T N E R : EUROPEAN FINANCIAL CONGRESS JUNE 2014, SOPOT Gala dinner at the Gdaƒsk Shipyard 24 June 2014, Gdaƒsk Shipyard, Club B90 P A R T N E R : 18 EUROPEAN FINANCIAL CONGRESS EUROPEAN FINANCIAL CONGRESS 19

9 S P E E C H E S : 2 4 J U N E Infrastructure investments in Europe The role of the European Investment Bank Laszlo Baranyay Vice-President, European Investment Bank P A R T N E R : 2 4 J U N E The real crisis, the financial crisis and the rescue measures Hans-Werner Sinn President of the Ifo Institute for Economic Research Professor of Economics at the University of Munich C O M M E N T A R Y : Mateusz Morawiecki President of the Management Board, Bank Zachodni WBK M O D E R A T O R : S P E E C H E S Michał Kobosko Editor-in-chief, Project Syndicate EUROPEAN FINANCIAL CONGRESS 21

10 THEMATIC BLOCK SECURITY AND DEVELOPMENT OF THE BANKING SECTOR Digital commerce trends, opportunities and threats for the banking industry Speech 24 June 2014, Marco Polo E S p e e c h : Michele Marrone Managing Director, Accenture European Lead for Analitics and Mobility C o m m e n t A R Y : Joao Bras Jorge President of the Management Board, Bank Millennium K e y i s s u e s : The session Digital commerce trends, opportunities and threats for the banking industry will be devoted to the changes and opportunities taking place on the financial market. S E C U R I T Y A N D D E V E L O P M E N T O F T H E B A N K I N G S E C T O R Michele Marrone, Accenture European Lead for Analitics and Mobility, will present the research on the trends that can be noticed in the behavior of the contemporary consumers, he will show how traditional trade is being transformed into d-commerce and he will also explain how Accenture perceives the role of banks in today s dynamic and digital world. His presentation will include many examples of solutions implemented by the leaders standing EUROPEAN FINANCIAL CONGRESS 23

11 at the head of the global digital banking (r)evolution. The role of banks in d-commerce space should be perceived multi-dimensionally. The revolution taking place in commerce today is driven by technology, which will revolutionize the way B&M retailers promote, sell and manage the relationship with customers, and the way consumers shop and pay in the store. What s important for banks, payments are being disrupted by new technology that eliminates the need for traditional infrastructure, making payments a seamless moment of truth within the shopping process. To meet their customers requirements, retailers reach for solutions such as Google Wallet. In this way, players from outside the industry join the game and also want to have their share in profits, which forces traditional banks to continuously implement more flexible and broader product offering and omni-channel access to their services. In the payment race the banking sector has one very important asset. Millions of mobile devices, which are on 24/7 and collect plenty of information about every individual customer, combined with the history of transactions in his account give them a considerable advantage. Analytics, Mobile and Big Data may become a solution that will help the sector design an optimal offering for customers. At the meeting, Michele Marrone will present the concept of an Everyday Bank - created by Accenture and successfully implemented at customers, which is an answer to the changes taking place in the global and digital economy. We kindly invite you to attend the session Digital commerce trends, opportunities and threats for the banking industry and to take active part in the discussion. P A R T N E R : Today, the concept of providing customers with bespoke products on an as-needed basis, for instance, using new production paradigms such as 3D printing with express and automatic delivery (e.g. drones) may seem far-fetched. However, it is very likely to become popular in the near future. The banking sector must face the new d-commerce reality if its model proves unattractive to consumers and not compliant with the modern trends, it will be replaced with more innovative and simpler solutions provided by external competitors

12 THEMATIC BLOCK SECURITY AND DEVELOPMENT OF THE BANKING SECTOR I N T R O D U C T O R Y P R E S E N T A T I O N : Piotr Sadza Director, Financial Institutions Sector, Deloitte M O D E R A T O R : Banking habits of SMEs in Poland. Results of the Deloitte survey concerning bank customers in the SME segment. Debate 24 June 2014, Marco Polo E Andrzej Lachowski Partner, Financial Institutions Sector, Deloitte I N V I T E D P A N E L I S T S : Mariusz Cholewa President of the Management Board, Credit Information Bureau Przemysław Gdaƒski Vice-President of the Management Board, mbank S.A. Andrzej Gliƒski Vice-President of the Management Board, Bank Millennium S.A. Jacek Obł kowski Vice-President of the Management Board, PKO Bank Polski S.A. Grzegorz Piwowar Vice-President of the Management Board, Bank Pekao S.A. Józef Wancer President of the Management Board, Bank BG S.A. K E Y I S S U E S : The market of small and medium-sized enterprises in Poland is one of the most prospective customer segments for banks. SMEs generate up to ~18% of the national GDP and hire ~40% of the employees in the companies sector. This segment is characterized by a very high level of diversity from the viewpoint of needs and preferences in terms of cooperation with banks. The SME segment includes both companies that are small, with stable prospects and small product requirements, which finance their activities with their own funds, as well as companies with large development potential, focusing on growth and leading active operations in foreign markets, with large needs for the current financing, investment financing, and trade finance. This diversity clearly translates to revenue potential for banks. The cost aspect is equally important: the one related both to the credit risk and the cost of customer service corresponding to the actual needs of the customer. The first step to build profitable banking for the SME segment is to understand who the customers are, how they bank and what they expect. To this end, Deloitte has conducted extensive research in this sector in Poland, which helped to capture the needs, the intensity of use of individual products, preferences for access channels, including electronic channels and key expectations and the most important criteria for the selection of the bank. Issues for discussion: What is the potential of the SME segment for banks in Poland? Which group of SME customers are the most attractive for the banks? How to build an attractive offer for the SME customers? What are the most effective channels to reach SME customers? 26 27

13 THEMATIC BLOCK SECURITY AND DEVELOPMENT OF THE BANKING SECTOR How to diversify the sales and service model for the SME customers? What will the SME banking look like in Poland over the next 3-5 years? D E B A T E P A R T N E R S : Non-Euro countries in relation to the Banking Union Debate 24 June 2014, Marco Polo E M o d e r a t o r : Michał Kobosko Editor-in-chief, Project Syndicate I N V I T E D P A N E L I S T S : Jean-Christophe Cabotte Deputy Head of Supervisory Law Division, European Central Bank Iwona Kozera Partner, Head of Financial Markets, EY Alexander Lehmann Lead Economist for Central Europe, EBRD Mario Nava Director, Financial Institutions, European Commission Andrzej Reich Director of the Department of Banking Regulations, Payment Institutions and Credit Unions, Polish Financial Supervision Authority Bernhard Speyer Senior Advisor, Senator's Office, Berlin Senate for Finance Peter Walsh Deputy Head of Division, Institutional & Sectoral Oversight, DG Micro-Prudential Supervision, European Central Bank 28 29

14 K E Y I S S U E S : The Banking Union concept was developed at the EU Summit in June It is increasingly seen as a solution whose impact on the process of European integration can be compared with the effects of the Coal and Steel Community established years ago. Due to legal conditions, the Banking Union only covers the Eurozone countries. Other countries may be full members, although it is possible that they establish close cooperation with the Banking Union. It is a substitute of the full membership. The adopted solution allows non-eurozone countries to participate to a limited extent in the decision-making process. For this reason, the regulation entrusting the ECB with supervision over the banking sector of the Eurozone has introduced safeguards to limit the potential risks associated with the different status of the countries cooperating closely with the ECB. It should be kept in mind that the Banking Union is not only about close cooperation. First of all, the solutions which prevent the factors threatening the stability of the Eurozone banks and the banking system as a whole are primarily the access to the EU's liquidity and capital support. This mechanism will not be available to the banks of close cooperating countries. The Banking Union will go live in four months. The next months will help us to understand better this fact and its effects. Right now, there is a number of questions worthy of discussing: Is the Banking Union only an organisational solution, or will it also have far-reaching political implications? Will it lead to the rapid integration of countries in the Eurozone by dividing the Member States into two unequal groups? If so, which group of countries will the closely cooperating countries fall into? What should be the approach of the non-eurozone countries to the earlier membership in the Banking Union? How should the legal measures intended to protect them be rated? Are they appropriate or insufficient? Perhaps they are not touching the essence of the problem and should be supplemented in some way? D E B A T E P A R T N E R S : Issues for discussion: What is the Banking Union now, what will it be in the future? How to evaluate the mere fact of establishment of the Banking Union? What are the benefits and threats of the parallel operation of two (actually three) systems: the Eurozone countries, closely cooperating countries, and countries outside the Eurozone? What is the anticipated costbenefit account? 30 EUROPEAN FINANCIAL CONGRESS EUROPEAN FINANCIAL CONGRESS 31

15 THEMATIC BLOCK SECURITY AND DEVELOPMENT OF THE BANKING SECTOR M O D E R A T O R : Clients take over control in banks Debate 24 June 2014, Marco Polo F Władysław Szwoch Financial Services Sector Leader, IBM Global Business Services, CEE I N T R O D U C T O R Y P R E S E N T A T I O N : Clients take over control in banks" Władysław Szwoch Financial Services Sector Leader, IBM Global Business Services, CEE I N V I T E D P A N E L I S T S : Maria Jose Campos Member of the Management Board, Millennium Bank S.A. Piotr Królikowski Member of the Management Board, Provident Polska S.A. Piotr Popowski Director, EY Mirosław Skiba Member of the Management Board, Bank Zachodni WBK K E Y I S S U E S : At times of universal digitalization, access to the Internet and ubiquitous information, more than half of CEOs of banks in the world expect forthcoming difficulties in understanding and involving customers as individuals, rather than as market segments. Banks should prepare for the future by: being open to influences and suggestions from customers; emotional involvement of customers in proposals of the bank and they can do this through innovations, particularly innovations based on digital solutions. A growing number of CEOs believe that customer feedback should be used not only with regard to traditional areas, such as creation of new products and services. CEOS are even willing to open up to opinions of customers in tasks which to date were the sole tasks of the CEOs, namely development of business strategy. Recognition of customers as new members of the management board is also a way to unite the management board for one common goal to meet the needs of customers. Erosion of trust is now a major challenge for many banks on the road to growth. Management boards are therefore open to collaborate with customers and are looking for new ways to speak with them and build trust. If one initiative could unite the whole management board to work together for the success of the bank, building relations with customers is definitely the solution. Issues for discussion: What are the best ways to engage customers which lead to development of good relations with customers? Customer advisory boards? Opinion leaders in social media other? How to define unique customer experience so that bank customers feel at home, whether they use online services, mobile solutions, social networks or visit a branch? 32 33

16 THEMATIC BLOCK SECURITY AND DEVELOPMENT OF THE BANKING SECTOR Is hiring a creative agency to design customer experience in a mobile or online service the solution? How to ensure the same experience at the branch? Are we ready to change the way in which we run banks if customers require so? How can we use social networks to gather customer feedback and respond to such feedback? How can we find the right balance between the world of social media, online banking and branches? How to involve all employees of banks in creation of the proper customer experience? What are the innovative ways of analyzing customer behaviour so as not to interfere with customer privacy? How can the banks work together with other institutions outside the banking sector in order to enhance customer experience? D E B A T E P A R T N E R : M o d e r a t o r : Jerzy Kalinowski Partner, KPMG Development of mobile payments in Poland Debate 24 June 2014, Marco Polo E I N V I T E D P A N E L I S T S : Jakub Grzechnik Director, Payments and Analyses, PKO Bank Polski S.A. Andrzej Malicki President of the Management Board, Polish Payment Standard Jarosław Mastalerz Vice-President of the Management Board, mbank Małgorzata O Shaughnessy Senior Vice-President, Visa Europe Mirosław Rakowski President of the Management Board, T-Mobile K E Y I S S U E S : Internet revolution and the development of mobile technologies has radically changed the patterns of consumer behaviours and preferences. We are increasingly more often talking about the digital consumer, who regularly uses fixed and mobile access to the global network resources and digital services to satisfy their needs. The widespread use of smartphones allows the consumers to use mobile banking and payments in a very conscious manner

17 THEMATIC BLOCK SECURITY AND DEVELOPMENT OF THE BANKING SECTOR However, the development of the mobile payments market in Poland is currently not proportionate to adoption of mobile telephony, smartphones and mobile Internet in Poland. The aim of the session is to find answers to key questions from the viewpoint of development of the mobile payments market in Poland: Why digital consumers need mobile payment services? What are the media for the development of mobile payments in the world? Are Polish consumers ready for the widespread adoption of mobile payment services? Is the market of mobile payments still at its embryonic stage or has it already ripened? What are the main barriers to the implementation and universal acceptance of mobile payment systems in Poland? Are there any technological barriers? How can we overcome these barriers? How can we effectively build a mobile payment ecosystem in Poland to support universal and rapid acceptance of mobile payments? What role in the development of mobile payments in Poland can the individual market players have (banks, payment institutions, mobile operators, solution providers)? D E B A T E P A R T N E R S : S P E E C H : Whether and how to separate retail banking from investment banking in the EU? Debate 24 June 2014, Marco Polo F Mario Nava Director, Financial Institutions, European Commission I N V I T E D P A N E L I S T S : Adam Ketessidis Head of Bankresolution, Federal Financial Supervisory Authority, Germany Tomasz Piwowarski Director of the Department of Inspections for Banks, Payment Institutions and Credit Unions, Polish Financial Supervision Authority Jürgen Schaaf Counsellor to the Executive Board, European Central Bank Andrzej Sławiƒski Director General of the Economic Institute, National Bank of Poland Wiesław Thor Counsellor to the Board, Deloitte 36 37

18 K E Y I S S U E S : After the Great Depression, the US banking was characterized by the statutory distinction between commercial banking and investment banking. From 1984 to 1999, the lobbyists were pushing for reinstatement of universal banking in the US that would combine commercial and investment banking, which eventually happened in the year Earlier, in 1989, such a possibility was introduced in the EU by the so-called the Second Banking Directive. One of the consequences was a rapid surge in profits and balances of banks. The crisis of 2007 manifested, inter alia, the significant risks associated with a strong desire to achieve a superstandard return on investment activity of banks, but primarily the risks of charging the deposits are guaranteed by the deposit guarantee schemes, and subsequently by the state, with the risk of speculative activities. The scale of the losses incurred as a result of the recent crisis resulted in preparation of a number of reports in the US and Europe, which scrutinize the causes of the crisis. The most important of them include: The Financial Crisis Inquiry Report (USA), Volcker s Rule (USA), Vickers Report (Great Britain), and Liikanen's Report (EU). The latter calls for: separation of excessive commercial activity as regards transactions conducted on own account, assets and derivatives associated with market animation operations, exposure to hedge funds, SIVs (structured investment vehicles) and private equity funds to another legal entity, and additional separation of activities of banks for possible improvements of the scope of resolution operations. After the Liikanen's Report was published, some Member States began to implement recommendations of the report: The European Parliament issued a resolution on the reform of the structure of the EU banking sector; France and Germany have been updating their legislation which separates speculative / investment activities from traditional activities of the banks, a process has been started in the UK to implement the proposals included in the Vickers Report to the British law. In Poland, at the beginning of January 2014 the Commission for Banking Supervision accepted recommendations on compulsory separation of speculative activities on own account after a certain materiality threshold is exceeded. In January 2014, the European Commission launched consultations on the draft legislative changes providing for mandatory separation from the bank, to another entity in the group, of speculative activities after a specified scale of this activity is exceeded. Issues for discussion: What was the impact of the speculative activities of universal banks on the scale of the last financial crisis? Was the speculative activity the sole/main factor leading to the crisis? What risk factors are associated with retail activities and which are associated with investment activities? Are universal banks necessary? - account of benefits and costs. Is there place for any investment activities at all in a retail bank? How should Liikanen Report's recommendations in the field of separating speculative activities of banks be evaluated? How should the process of separating speculative activities from retail activities be carried out? D E B A T E P A R T N E R : 38 39

19 THEMATIC BLOCK SECURITY AND DEVELOPMENT OF THE BANKING SECTOR M o d e r a t o r : Asset Quality Review and what next? Debate 24 June 2014, Marco Polo F Adam Kołaczyk Partner, Financial Institutions Sector, Deloitte I N V I T E D P A N E L I S T S : Mirosław Boda Vice-President of the Management Board, ING Bank Âlàski S.A. Andrzej Burliga Member of the Management Board, Bank Zachodni WBK Bartosz Drabikowski Vice-President of the Management Board, PKO Bank Polski S.A. Piotr Konieczny Member of the Management Board, Raiffeisen Bank Polska S.A. Andrzej Reich Director of the Department of Banking Regulations, Payment Institutions and Credit Unions, Polish Financial Supervision Authority Bernhard Speyer Senior Advisor, Senator's Office, Berlin Senate for Finance Dariusz Szkaradek Partner, Financial Institutions Sector, Deloitte K E Y I S S U E S : What has caused the need to carry out an asset quality review (AQR) in banks? How does the AQR translate to the Polish banking sector? What are the positive and negative aspects of the AQR? Are the banks afraid of the AQR results? If so, where do such concerns come from? Is there a real risk/threat that the AQR results may be significantly different from the results reported in the financial statements for 2013? Does the AQR conservative methodology take into account the specific nature of individual local markets? Is it possible to carry out the AQR in a uniform manner for all banks and countries? Will a new reporting standard be created on the basis of the AQR? How will the banking landscape look like after the AQR? D E B A T E D E S C R I P T I O N : In recent times we have seen an increasing discussion on the European integration in all of its dimensions, starting with the purely political dimension to social, economic or military dimensions. Dimension of integration of the financial sector in the form of a Banking Union is one of the most important considerations. The establishment of the Banking Union is designed to contribute to minimisation of social concerns about the health of the banking sector and the long-term quality of assets. This concept is built on three pillars. One of them is the Single Supervisory Mechanism, SSM. The single supervisory mechanism is to be exercised by the European Central Bank (ECB) in the direct form over relevant credit institutions and in the indirect form, in close cooperation with the competent national authorities, over all other credit institutions. Before taking over direct supervision over relevant credit institutions, the ECB, in cooperation with the 40 41

20 local regulatory bodies, performs a review of the "opening balance", which consists of the Asset Quality Review (AQR) and a stress-test. The AQR and stress-testing will be applied to 128 largest banks in 18 European countries, which account for 85% of the assets of the banking sector. In Poland, a few banks which are owned by banks from the Eurozone will be assessed in the framework of the Pan- European process. At the same time, the Polish Financial Supervision Authority has decided to use the same methodological assumptions to analyse the quality of assets in selected 15 banks, including nine banks in the EU banking groups surveyed by the ECB, and six local banks. For banks surveyed by the ECB, works are carried out in cooperation with the PFSA, in the other banks, works are carried out by the PFSA only. Thus, the Polish banking sector will be subject to the same assessment as the Eurozone banks. The year 2014 will mark the definition of the opening balance for the banking sector, by applying a uniform standard for assessing the quality of assets, both in banks in Europe and in Poland. It was decided to subject the Euroland financial sector to uniform evaluation, in order to begin the process of enforcing assumptions of the Banking Union based on full, unified knowledge. At the European level, introduction of a single supervisory mechanism and the preceding examination of the quality of assets as well as stressed tests turned out to be necessary, as confidence in the financial sector is still small. The tests are designed to dispel the last doubts as to the condition of the banking sector. There is a deep belief in the Polish banking environment that the situation of the domestic sector is stable and secure. However, the question remains: AQR and what's next? D E B A T E P A R T N E R S : THEMATIC BLOCK SECURITY AND DEVELOPMENT OF THE BANKING SECTOR Recommendations for increasing the safety of the Polish banking system through development of covered bonds market where are we? Conference 25 June 2014, Columbus AB P A R T I C I P A N T S : Zbigniew Jagiełło President of the Management Board, PKO Bank Polski S.A. conference host Rafał Kozłowski Advisor to the President of the Management Board of PKO Bank Polski, Project Manager of PKO Bank Hipoteczny Tomasz Mozer President of the Management Board, Pekao Bank Hipoteczny S.A. Grzegorz Piwowar Vice-President of the Management Board, Bank Pekao S.A. K E Y I S S U E S : The October Retail Banking Congress presented the Ministry of Finance and the Ministry of Justice with recommendations for increasing the security of the Polish banking system through development of the covered bonds market. These recommendations are the answer to the most important system-wide risk of the Polish banking sector, which results from the structural liquidity gap (long-term loans are financed with short-term deposits). Following their 42 43

21 implementation, the Polish covered bonds will develop, mainly to refinance home loans. The Ministries and the Polish Financial Supervision Authority carry out intense work on the implementation of recommendations of the Retail Banking Congress. Representatives of the banks will present the current status of the works, deadlines and expected deliverables. Conference agenda: 1. Context: the risk of liquidity dates mismatch; European regulations and requirements; the safety of banks and customers; release of liquidity to finance development of the economy (SMEs, business loans) by acquiring financing from institutional investors from Poland and abroad; 2. Recommendations of the Retail Banking Congress 3. Where are we with implementation of changes into acts of law (law on covered bonds and mortgage banks, investment limits for the open pension funds and insurance companies, tax laws)? When will such changes be introduced? 4. What changes in the PFSA recommendations concerning covered bonds? 5. What are the expected results of changes? An attempt at quantification. the scale of issue; release of liquidity to be allocated by banks to other forms of lending (e.g. SMEs, business, etc.). 6. Q&A F I N A N C I N G O F I N F R A S T R U C T U R A L P R O J E C T S 44 EUROPEAN FINANCIAL CONGRESS

22 THEMATIC BLOCK FINANCING OF INFRASTRUCTURAL PROJECTS Macroeconomics of the infrastructure Debate 24 June 2014, Columbus CD The role of the state in developing and maintaining the technical infrastructure: the impact of actions of the state on the business cycle, economic stability and macroeconomic imbalances. Infrastructure and coordination of policies at the national and EU level. D E B A T E D E S C R I P T I O N : M O D E R A T O R : Dariusz Filar Professor, University of Gdaƒsk I N V I T E D E X P E R T S : Mirosław Gronicki Minister of Finance of Poland in the years Jerzy Hausner Professor, Cracow University of Economics Janusz Lewandowski European Commissioner for Financial Programming and Budget Marek Rozkrut Chief Economist, EY K E Y I S S U E S : The role of the state in the economy: Is influence of the state on the Polish economy excessive or perhaps just slight? Is it possible to precisely determine what are the objectives of the state in the economy? What is the efficiency/effectiveness of the Polish State institutions in achievement of such objectives? Interventionism: What is the scope/scale of interventionism in the Polish economy? What tools are available to state institutions? Is it necessary? The administrative technical infrastructure is one of the major barriers to economic growth in Poland. Although the telecommunications infrastructure is relatively welldeveloped and does not deviate too much from the level achieved in the countries of the European Union, the situation is much worse in inland transport and power networks. In particular, Poland does not have a well-developed network of roads and railways. The current state of the technical infrastructure requires significant outlays necessary for the expansion, modernization and maintenance of the infrastructure. Currently, the Government does not have effective instruments of economic policy to ensure development of the infrastructure. Management of this sphere is scattered among multiple ministries and institutions while plans are adopted on a wishful thinking basis. In particular, such plans do not specify the sources of financing the investments planned. From 2008 to 2014 the economic policy positively and negatively affected the business cycle. At first ( ) both current and capital expenditures were increased (investment expenditures) to prevent recession. This increased the public finance sector deficit from 1.9 in 2007 to 7.4% of GDP in At the same time, the share of public investments in the GDP increased. This share increased until mid-2012 (Euro 2012) followed by a sharp reduction in the following quarters. In the first case, it was a classic positive 46 47

23 THEMATIC BLOCK FINANCING OF INFRASTRUCTURAL PROJECTS Keynes impulse (manifestation of state intervention in the economy). In turn, from the second half of 2012, it turned into a negative demand impulse, leading to the decline in domestic demand and curbing the economic growth. As far as the initial impulse was understandable, the violent cut in investment expenditure had to have a negative impact on the Polish economy, resulting in a disturbance (reduction) of the business cycle. With the new EU financial prospect, this is likely to repeat. After the experience of the years it is necessary to think over the method of managing the investment process in the infrastructure so as to not cause excessive fluctuations in investment expenditure and not to interfere with the business cycle. Otherwise, we will suffer unnecessary economic costs (excessive slowdown in economic growth) and social costs (possible growth in unemployment). D E B A T E P A R T N E R : M o d e r a t o r : Legal relations between the State and entrepreneurs forecast for infrastructural investments in Poland Debate 24 June 2014, Columbus CD Tomasz Siemiàtkowski Professor, Warsaw School of Economics Member of the Companies Law Unit, Civil Law Codification Commission Głuchowski Siemiàtkowski Zwara Law Firm I N V I T E D E X P E R T S : Zbigniew åwiàkalski Professor, Faculty of Law and Administration, Jagiellonian University in Crocow T. Studnicki, K. Płeszka, Z. åwiàkalski, J. Górski Law Firm Wojciech J. Katner Professor, University of Lodz Jugde of the Civil Chamber, Supreme Court of Poland Andrzej Kidyba Professor, Faculty of Law and Administration, Maria Curie Skłodowska University in Lublin Zygmunt Niewiadomski Professor, Warsaw School of Economics Chairman of the Construction Law Codification Commission, Supreme Administrative Court 48 49

24 THEMATIC BLOCK FINANCING OF INFRASTRUCTURAL PROJECTS K E Y I S S U E S : As a result of performance of contracts between the public party and a private party, there have been a number of tensions and claims resulting in arbitration and judicial proceedings in Poland over the recent years. Currently we are looking towards investments related to construction of the energy infrastructure, gas infrastructure, etc. The contracting authority is yet again the State and the contractors are the same largest construction companies (private companies involved in litigation with the State Treasury, where the value in dispute exceeds 10 billion zlotys). The private party thus distances from entering into further contracts, fearing that the story may happen again. On the other hand, if such companies do not conclude the contracts, the state will not implement the next considerable infrastructural investments. Experts invited to the debate will discuss the history of legal relations between the State and the infrastructural companies, as well as the solutions that would prevent similar events from happening in the future when implementing planned contracts (in particular as regards private and legal issues, legislative, bureaucratic, axiological, attitudinal and any others issues that seem to be relevant). M o d e r a t o r : Dilemmas of the European energy policy Debate 24 June 2014, Columbus CD Marek Garbicz Professor, Warsaw School of Economics I N V I T E D E X P E R T S : Mirosław Bieliƒski President of the Management Board, ENERGA SA Katarzyna Jasiƒska Colleague of the Warsaw School of Economics Mariola Juszczuk PhD student, Warsaw School of Economics in Warsaw Zbigniew Kasztelewicz Professor, AGH University of Science and Technology in Kraków Stephan Lehrke Senior Partner & Managing Director, The Boston Consulting Group Partner in Warsaw and Berlin Wojciech Paprocki Professor, Warsaw School of Economics Jan Popczyk Professor, Silesian University of Technology 50 51

25 K E Y I S S U E S : Energy policy of the EU carry on or change? The future European energy scenarios are unclear. The pace of the EU's switching to renewable energy may slow down or the "escape forward" scenario will be implemented, as a result of aggravating the situation around Ukraine. Threats to Poland? Dilemmas related to the European energy policy are linked to the TEN project, which comprises three sectors: transport, energy and ICT. Modern solutions (until 2050) should take into account integration of actions in these three sectors. Policy of standing on many legs. Under conditions of high uncertainty in energy markets: maintaining the important role of hard coal and lignite in the national energy balance, expansion of the potential of renewable energy sources when they ensure economic efficiency, continuation of the efforts to find new sources of natural gas (shale gas), priority of energy saving and demand management which results in reduced consumption, especially at peak times. Distributed energy. Prosumer energy built on renewable energy sources. Real solutions on a mass scale based on cheap technologies of energy storage. Consequences of the lack of availability and unreliability of key renewable energy sources (wind and solar) for the operation of the power engineering system. Desired or excessive level of subsidising renewable energy sources? J U S T I F I C A T I O N : EU energy policy has been dominated by environmental concerns (the other elements of the triple objective, such as competitiveness and security have been ignored to date). Today we are in a trap, because this policy has completely broken into pieces. Strong EU support mechanisms for the renewable energy sources in the form of high subsidies and privileged access created excessive supply of (unavailable!) renewable energy. This has created real problems for regulatory capacity of power systems as well as for the competitiveness of the European industry. The technological revolution in shale gas, Fukushima and Ukraine have posed new challenges related to building of energy strategy for the EU and Poland. An EU policy will be implemented on such quicksand. For political, economic and prestigious reasons, the EU cannot simply withdraw from its existing strategy. Poland has therefore every reason to believe that the anti-coal course will continue. The crash of the existing EU strategy poses certain opportunities of developing a more realistic national and EU policy. We need, however, a substantive and not ideological discussion on this topic. D E B A T E P A R T N E R : Expansion of the transnational connections infrastructure. Benefits and risks. Risks as the possibility of vigorous pushing and shoving of certain players. Mechanism of a strong fare dodger abusing someone else's infrastructure. Not necessarily the same advantages without mutual agreement and arrangements. 52 EUROPEAN FINANCIAL CONGRESS EUROPEAN FINANCIAL CONGRESS 53