WARSAW - POLAND'S central bank said on Monday it was preparing a package of measures to boost confidence in the country's banking sector, and the government announced plans to guarantee bank deposit up to euro50,000 (S$100,547).

Polish National Bank chief Slawomir Skrzypek gave few details of the package, apart from saying it would be designed to boost confidence and lending among local banks.

Mr Skrzypek said there 'isn't a problem of a lack of liquidity in the system', but that 'the need could arise to reinforce certain banks with periodic liquidity'.

He said the central bank was preparing a number of instruments to provide banks with that extra security.

Prime Minister Donald Tusk was to meet later on Monday with his Cabinet to assess the bank bailout package that the 15 euro zone countries developed in Paris on Sunday. Poland is an European Union (EU) member, but does not use the euro.

Mr Tusk and Finance Minister Jacek Rostowski told a news conference before the meeting that the Cabinet intends to follow an EU-wide directive to guarantee bank deposits up to at least 175,000 zlotys (S$99,126).

The Cabinet also is expected to allow the state to bail out banks if necessary, but Mr Rostowski sought to stress that Poland does not face the financial ills currently plaguing much of Europe.

'We need to be ready, but we don't foresee such needs for a long time, and I don't think ever,' Mr Rostowski said.

'The Polish financial sector is truly strong, particularly when compared to other countries, and it has no such needs.' -- AP