Four ways Poland’s state bank helped it avoid recession
Don't forget Poland!
http://www.brookings.edu/blogs/future-development/posts/2015/06/12-poland-financial-crisis-piatkowski
Poland was the only economy in the European Union to avoid recession during the 2008 global financial crisis. Even in 2009, when the whole EU went into recession, Poland continued to grow at 2.6 percent. Today, Poland’s economy is a quarter larger than at the onset of the crisis, while the economy of the EU as a whole grew by only 0.7 percent (Figure 1).
This remarkable performance resulted from a number of factors, including timely fiscal and monetary stimulus, a large depreciation of the currency, and a relatively large domestic economy, which limited the country’s exposure to falling international trade. In addition, growth was supported by growing inflows of funds from the European Union, a diversified export structure, and sustained confidence among Polish consumers and entrepreneurs.
Poland’s impressive performance has also been driven by a healthy banking sector. Polish banks remained profitable, liquid, and well-capitalized throughout the crisis. They did not need a single dollar of public support. In contrast to most other EU countries, Poland’s banks managed to increase lending to the private sector during the crisis, supporting the country’s growth.
An overlooked factor has been the counter-cyclical role of PKO BP—a commercial public bank and the largest player in the Polish market with almost a 20 percent market share—in helping to deal with the crisis.
While foreign-owned banks, which controlled almost 75 percent of the banking sector’s assets, were cutting lending in panic, PKO BP was expanding lending at the same time. Its loan portfolio increased by 1.2 percent of GDP in 2009 and represented 40 percent of total new bank lending in that year. The bank’s lending increased for all market segments, including the crucial small and medium-sized enterprise sector.
