Poland's Citi Handlowy CEO backs regulator proposal for FX loans
- It seems that the proposal of the KNF, as well as the support of the National Bank of Poland, is the best solution on the table and allows for the elimination of systemic risk at some point.
- Poland's central bank said on Tuesday it may consider getting involved in the process of converting foreign currency mortgages into zloty-denominated ones by banks, under certain conditions.
WARSAW: The Polish regulator's proposal to convert mortgages in Swiss francs into zlotys combined with possible central bank support would be the best solution to problems caused by foreign exchange loans, Poland's Citi Handlowy bank said on Thursday.
Like other mainly East Europeans, many Poles borrowed in francs more than a decade ago to take advantage of low Swiss interest rates at the time. But borrowers found repayments balloon when the zloty weakened sharply against the franc.
The head of Polish financial regulator KNF proposed in December converting those loans into zlotys as if they had originally been taken out in the Polish currency.
"It seems that the proposal of the KNF, as well as the support of the National Bank of Poland, is the best solution on the table and allows for the elimination of systemic risk at some point," Slawomir Sikora told a news conference.
Poland's central bank said on Tuesday it may consider getting involved in the process of converting foreign currency mortgages into zloty-denominated ones by banks, under certain conditions.
The chief executive of Polish lender mBank also said on Tuesday the KNF proposal was the "the most far-reaching, sensible solution".
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