Polish Finance Minister Andrzej Domański presents strategy to strengthen capital market

Finance Minister Andrzej Domański presented a broad government strategy on Friday, with the overarching goal of strengthening and developing the Polish capital market. In his speeches, reported by numerous economic portals, the head of the finance ministry indicated that making Poland a competitive and attractive financial center in Central and Eastern Europe is a priority for the current cabinet. Domański emphasized that a strong, deep, and liquid capital market is essential for financing economic development, innovation, and increasing citizen prosperity. A key, concrete element of this strategy is the plan to direct funds accumulated in Open Capital Funds (OFK) to the Warsaw Stock Exchange (GPW). The minister estimates that approximately 100 billion złoty can be sourced from the OFK pool for the capital market. These funds, coming from mandatory citizen contributions, are to bolster the stock exchange, increasing its liquidity and capitalization. This action fits into the broader context of reforming Open Capital Funds, which aims to increase the efficiency and security of the capital accumulated within them. The Polish capital market, led by the Warsaw Stock Exchange, developed dynamically after the political transformation of 1989, becoming the largest stock exchange in the Central and Eastern Europe region. In recent years, however, it has faced challenges such as the outflow of foreign capital, a decline in the number of debuts, and competition from other markets and alternative forms of investment. The second pillar of the announced actions is incentives for large state-owned companies to conduct stock exchange debuts. The government sees this as an opportunity to broaden the investment offering available to investors, both institutional and retail, and to further strengthen the position of the WSE. Domański expressed the ambition for Poland to become a leader in changes regarding economic financing in our part of Europe. This means not only attracting capital but also creating modern legal and institutional frameworks conducive to investment. The minister's statement also included mentions of the need for changes in the pension system, which would be consistent with the policy of strengthening the capital market. This involves increasing the role of private capital in financing future pensions and developing attractive, long-term savings products for Poles. Domański emphasized that a strong capital market serves not only large enterprises and institutional investors but should also become an accessible and safe tool for multiplying savings for ordinary citizens. The presented plans fit into the global trend of seeking alternative sources of financing the economy beyond traditional banking. „Wzmocnienie rynku kapitałowego jest priorytetem rządu. Chcemy, aby Polska była liderem zmian w Europie, jeśli chodzi o finansowanie gospodarki.” (Strengthening the capital market is a government priority. We want Poland to be a leader of change in Europe when it comes to financing the economy.) — Andrzej Domański The plans announced by Minister Domański have met with keen interest from financial circles. Experts point out that directing part of the OFK funds to the stock exchange could significantly improve its liquidity and attract new investors. At the same time, they raise issues related to managing the risk of such allocation and the need to ensure appropriate safeguards for citizens' savings. Another challenge will be effectively encouraging state-owned companies to go public, which will require transparent and attractive conditions. The implementation of these ambitious assumptions will depend on detailed legislative solutions and cooperation between the government, supervisory institutions, and the financial market itself.