National Bank of Poland

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The National Bank of Poland (Polish: Narodowy Bank Polski, NBP), is the central bank of Poland. It controls the issuance of Poland's currency, the złoty. The bank's headquarters is located in Warsaw, though it has its branches in every major town in Poland. Since December 22, 2000 it is headed by Leszek Balcerowicz, a former Deputy Prime Minister and Finance Minister of Poland as well as the current head of the Council of Monetary Policy. The NBP represents Poland in the European System of Central Banks, an EU organisation.

1 History
2 Structure
3 Reference
4 See also
5 External link

[edit] History

Ksawery Drucki-Lubecki, the founder of the first central bank of Poland

Although the bank has existed under its current name since 1945, it is a continuation of two previous central banks of Poland, both named simply Bank of Poland (Bank Polski). The first one was founded in Warsaw in 1828 by Prince Franciszek Ksawery Drucki-Lubecki. An institution of the government of the Kingdom of Poland, it was entitled with issuance of the Polish currency as well as control over the credit rates. It was also entitled with a concession to operate foreign currencies and buy off credits issued by foreign companies and banks.

5 złoty coin from the times of the November Uprising

Throughout its existence, the Bank of Poland was allowed to issue banknotes and coins up to the amount of its stock (initially 30,000,000 złotych, 42 millions in 1834 and 53 millions in 1841). As a legal entity, the bank also financed a number of important enterprises in Russian-held Poland. Between 1829 and 1837 it spent a large part of its income on road construction, until 1842 it was also the main sponsor of the coal mining development in the region of Zagłębie and the Old Polish Industrial Area around Skarżysko-Kamienna. Seriously crippled by administrative measures after the November Uprising, after the January Uprising it was made subordinate directly to the Russian Imperial Ministry of Treasury. During the period of liquidation of Polish institutions following the failed uprising, in 1870 it was deprived of the rights of a currency issuing organ and banned from giving long-term credits. On January 1, 1886 it was officially closed down and by 1894 its assets were swallowed by the State Bank of Russia.

When Poland regained its independence in 1918, it was lacking a central bank. Following the State Treasury Repair Act of January 11, 1924, minister Władysław Grabski created a new Bank of Poland as a joint stock company. Its stock was soon raised from the initial 100,000,000 złotych to 150 million, split onto 1.5 million shares. The bank was independent of the government of Poland, though it carried out its monetary policies. As the main shareholder, the President of Poland had the right to name the chairman and deputy chairman of the bank's board of trustees.

Until December 31, 1944 the bank had a monopoly for printing currency, with the gold standard of 40% or higher. The dividend could not exceed 8% of income. In case of higher income the state treasury had the right to 50% to 66% of it. Prior to the Polish Defensive War of 1939, all of the gold reserves were evacuated from Poland to Paris and then to London and Canada. The Bank continued its functioning in exile, as the central bank of the Polish Government in Exile and financed most of its armed forces. In 1946 the remaining pre-war gold reserves were returned to the new communist authorities of Poland, while the Bank of Poland itself was closed down and finally swallowed by the newly-created National Bank of Poland in 1952.

The latter was one of two banks allowed to operate in the planned economy of Poland after the war. It had a monopoly for currency, credits and cummulation of savings. The other bank, the PKO, was in turn responsible for private accounts. After the fall of the communist system in 1989, the market economy was reintroduced and the NBP limited its functions solely to currency control and supervision of other, privately-controlled banks.

[edit] Structure

The structure and functioning of the National Bank of Poland are regulated by the Constitution of Poland of 1997 and the National Bank of Poland Act of the same year^[1]. The President of the NBP is appointed by the Sejm, at the request of the President of the Republic of Poland, for a term of six years. The NBP President is responsible for the organisation and functioning of the National Bank. The same person cannot serve as President of the NBP for more than two terms of office. Apart from his function as the superior of the NBP staff, he is also the chairman of the Monetary Policy Council, the NBP Management Board and the Commission for Banking Supervision. He is also responsible for representing Poland in international banking and financial institutions.

Independent from the government and other state institutions, the president of the NBP cannot be a partisan or a member of any political party. The first president of the NBP was Hanna Gronkiewicz-Waltz, followed by the current chairman, Leszek Balcerowicz.