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Chaos remains at Poland regulator as former execs targeted

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Chaos remains at Poland regulator as former execs targeted

The Polish Financial Supervision Authority's former president and six of his subordinates have been charged by local prosecutors with seeking financial gains at the cost of the Polish Bank Guarantee Fund and deposit holders, Polish media outlets reported.

The officials, whose names were withheld for legal reasons, were detained by the Polish Anti-Corruption Bureau on Dec. 6, but were later released on bail, Rzeczpospolita said Dec. 7.

The charges are related to the FSA's supervision of local credit union SKOK Wołomin between 2013 and 2014. The credit union collapsed at the end of 2014, costing the bank guarantee fund 2.2 billion Polish zlotys in compensation payments to deposit holders. Prosecutors argued the charged officials waited too long over a decision to place SKOK Wołomin into forced administration, thereby increasing losses caused by the credit union, Parkiet said Dec. 7.

The Polish Bank Association criticized the arrests, noting they were unjustified and further undermined the credibility of the FSA and confidence in the Polish financial system.

This is the second arrest involving FSA executives in recent weeks.

In November, law enforcement authorities arrested the regulator's head, Marek Chrzanowski, over corruption allegations made by Leszek Czarnecki, the main shareholder of Getin Noble Bank SA and Idea Bank SA. Chrzanowski resigned from the post after the allegations came out, but denied any wrongdoing.

Some media outlets suggested that the Dec. 6 arrests of the FSA former officials, who worked for the regulator under the previous government, could be politically motivated and were an attempt by Poland's ruling party PiS to distract the public opinion from the arrest of Chrzanowski, who was appointed to the post under the current government.

Following the arrests, Polish Finance Minister Teresa Czerwińska said at a press conference that the Polish financial system is safe and stable, Reuters reported Dec. 7.

As of Dec. 7, US$1 was equivalent to 3.77 Polish zlotys.