The paper considers the evolution in the relationships between the Polish banking system and its international environment, from those developed under the inconvertible domestic currency, to a full participation in the network of convertible-currency economies, including unrestricted cross-border capital flows. Currency crises, particularly frequent in the past two decades, have revealed a whole web of connections between various elements of this system. They have also cast doubt upon the system's effectiveness in allocating financial resources on the global scale. This led to a discrete reduction in the valuation of bank assets and jeopardized the financial stability of many transforming countries. It is therefore necessary to appreciate the safety of our banking sector as it were "from the outside", against the backdrop of the entire international financial system.

The common element in the analysis of the domestic system on the one hand, and its external environment on the other, is the trust between debtors and creditors, exporters and importers of capital. Without trust, international finance does not exist. Poland's requirement for investment - both with respect to immediate restructuring and long-term goals - exceeds by 10% the country's propensity to save. Any loss of credibility with international institutional investors tends to trigger off a mechanism imposing stringent discipline on these participants in the international financial system who fail to observe its micro- and macroeconomic standards of soundness. Such relationships have an enormous impact on the operation of the domestic banking sector. Hence the need to monitor the influence of external factors on the Polish economy, which is a small open economy. The paper presents the basic notions which can be applied in this kind of analysis.