Economics
New Bank Tax Smothers Polish Loan Growth as Economic Risks Rise
- Loan growth slides to slowest pace in more than two years
- Banks turn down more corporate borrowers: central bank study
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Poland’s move to fund social spending by taxing the assets of banks risks hobbling one of Europe’s fastest-expanding economies as evidence mounts that the policy is eroding credit growth.
A month after imposing a levy on lenders’ assets, loan expansion slid to the slowest pace in more than two years in March. Instead of lending into the real economy, banks opted to buy a record amount of government debt, which is exempt from the tax, in the first two months of 2016, Finance Ministry data show.