A member of Poland's central bank's monetary policy committee has said the bank governor may have to step down over a scandal linked to leaked recordings in order to save the bank's reputation.
In comments published in Polish daily Gazeta Wyborcza on Friday, Andrzej Rzonca said the bank's reputation had been dealt a severe blow by the recorded conversations of top officials.
In the recording--made by undisclosed people in July 2013--two top officials are heard discussing a political deal under which the central bank would support the government with bond purchases in the event of any significant market turmoil. The central bank governor, Marek Belka, can be heard telling Interior Minister Bartlomiej Sienkiewicz that the bond purchases would be conditional on a change of finance minister.
The central bank and the government have acknowledged the authenticity of the recording and the identities of the officials. Mr. Sienkiewicz has said publicly he met Mr. Belka over dinner and added he would pursue the unknown people who made the recording.
"If the governor, in contrast to what he is saying, has indeed engaged himself politically then this disqualifies him as the head of the council," Mr. Rzonca says in a question-and-answer interview with the Gazeta Wyborcza. "Mr. Belka has to assess whether his denials [of political involvement] are enough to stop further erosion of the NBP's credibility."
Following the release of the recordings, Mr. Belka has on many occasions apologized for his expletive-heavy remarks, but has denied attempting to influence the government's personnel policy or promising any support for the governing party.
In an official statement following the release, the bank also said parts of the recorded conversation were taken out of context. The central bank's press office Friday stood by its original statement.
The 10-strong monetary policy panel said in a statement earlier this week it continues to cooperate well with Mr. Belka, and reaffirmed its determination to safeguard the zloty, which market participants viewed as being tacit support for the governor. The MPC also said it regretted that this situation had occurred.
However, two members of the panel, Andrzej Glapinski and Jerzy Hausner, weren't present during the panel's sitting. The latter said he will present his view on the situation during a July 1 regular sitting of the panel.
"The statement isn't voicing support, although there are members of the council who indeed back the governor in this unfortunate situation," Mr. Rzonca said.
Mr. Belka, who presides over the MPC, has also come under fire forhis derogatory comments about the rate-setting panel, something for which he has apologized.
State security officers and prosecutors have raided the office of the weekly Wprost that published the transcript and the leaked conversations, which has sparked a political and media firestorm over the issue of press freedoms, and has plunged the country's center-right government into one of its worst crises since it came to power in 2007.
In the wake of the scandal, Prime Minister Donald Tusk said Thursday he will not resign but early elections might be needed if the political crisis deepens.
Newspaper website: http://wyborcza.pl
Write to Patryk Wasilewski at firstname.lastname@example.org
(END) Dow Jones Newswires
June 20, 2014 05:31 ET (09:31 GMT)
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