Poland preparing to push lenders into conversion of forex loans

By bne IntelliNews January 2, 2017

Poland is preparing a set of “supervisory and regulatory mechanisms” to push banks into restructuring their forex loan portfolios, the National Bank of Poland (NBP) said on January 2.

A conversion plan has been on the cards since the Swiss franc leapt in value against the zloty in early 2015. Over 500,000 mortgage loans - mostly in the Swiss currency - were taken out by Poles ahead of the 2008 crisis. However, earlier suggestions of a forced conversion were shelved last year due to concerns over the stability of the banking sector.

So far, Poland has only worked on a bill to force banks to refund unfairly charged spreads on mortgage repayments in foreign currencies. The government said in August it would hold off for a year on a conversion scheme, asking banks to come up with their own voluntary plans.

However, Warsaw has also made it clear that if banks fail to self-regulate they will be pushed to carry it out by changes in the regulatory framework. That is what the NBP now says is in the works, PAP reports.

A working group has been set up to establish "supervisory and regulatory mechanisms that would stimulate the banks and their clients to make joint, voluntary decisions on restructuring FX housing loans," the NBP said.

"The guiding goal of the group is to find such solutions that would protect social interest without affecting negatively the stability of the financial system," the central bank stated. The group is expected to present the outcome of its work to the Financial Stability Committee at the end of March.










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