Financial Supervision Commission has approved so called capital resolution which allows convertible bonds and long-term bonds (with at least 10 years and up to 30 years maturity) to be included in the tier 1 capital. Different financial instruments are subject for approval by Financial Supervision Commission. According to the supervisory commission earlier statements Polish banking system has sufficient funds to ensure stability of the financial system.
The change in the regulations has been discussed recently and will allow rising tier 1 capital without issuing new shares. Taking into account our coverage universe, the chief beneficiary among the Polish banks is , which has the lowest tier 1 ratio of 6.2% at 1H09. The remaining banks should also benefit over the longer-term from increased flexibility in capital structure. We believe the news was expected therefore we expect neutral trading impact.