ABSTRACT
In order to increase the security of banks, as institutions of public trust, banking supervising regulators have introduced a whole new set of prudential regulations. This chapter presents the relation between the new prudential regulations introduced in the banking sector and the level of household debt in the banking and non-bank lending institutions' sector in Poland. The shape of the banking and non-bank lending institutions sectors in Poland is largely determined by prudential regulations introduced into this market. The obvious purpose of introduction of new regulations was to improve the standards of lending to people by banks. Financialization causes a rapid increase in the number of financial institutions offering loans, while easily accessible money encourages households to borrow more, often beyond measure. In the face of non-decreasing needs to use loan instruments by households there are grounds for believing that this activity moved to another sector of the market, namely to the sector of non-bank lending institutions.
