Poland Starts Work on Toughening Banks’ Swiss-Franc Burden
- Financial Stability Committee discussed Duda’s plan Wednesday
- Poland aims to lessen franc debt burden for borrowers
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Poland’s Financial Stability Committee kickstarted work Wednesday on stepping up capital requirements for banks holding foreign-currency home loans, part of a plan to unwind the country’s $36 billion in non-zloty mortgages.
The proposal, presented by President Andrzej Duda’s office last week, envisages a gradual conversion of mortgages as regulatory changes make holding loans denominated in currencies like the Swiss franc unattractive, as well as a draft law forcing lenders to repay clients as much as 4 billion zloty ($1 billion) for “excessive” exchange-rate spreads. Stocks and the Polish currency rallied on the day the proposal was unveiled as investors bet the solution will be less costly than assumed under an earlier plan.