Strong first impression
At first glance, Poland’s capital market looks strong. The Warsaw Stock Exchange (WSE) has excellent liquidity – in Q1 2025 the velocity ratio (turnover compared to market capitalization) reached 56.6%, the second highest in Europe.
Trading is active, investors are there and the infrastructure works well…
The paradox
But here’s the paradox: despite all this activity, the value of listed companies equals only about 21-25% of GDP, while the EU average is over 50%.
In other words – the market is busy, but still too small.
Many businesses prefer to borrow from banks instead of raising capital on the market and young companies struggle the most.
Enter gold-plating
One big reason is something called gold-plating.
When EU rules are implemented in Poland, lawmakers often add extra requirements, forms or procedures that Brussels never asked for.
The idea is to protect investors and increase transparency.
The effect?
Higher costs, slower processes and a market that’s less competitive.
Real-life consequences
The outcome is clear:
- foreign investors hesitate,
- IPO numbers drop while delistings grow,
- innovation in finance gets blocked by red tape.
How others do it
Meanwhile, countries like the Netherlands or Ireland simply “copy out” EU rules word-for-word, keeping costs low and cross-border activity easy.
Small steps in Poland
Poland has started making small corrections – for example: simplifying securities issuance for SMEs or reducing the duties of fund depositaries.
These are positive moves, but they don’t change the bigger picture so far.
The lesson
The lesson is simple: more rules don’t always mean better rules.
Gold-plating was meant to protect, but in practice it holds the market back.
If Poland wants its capital market to truly grow and finance innovation, it needs to move from “more law” to smarter law – simple, proportionate and predictable.
Because sometimes, less really is more.
