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Report: Poland weighs alternatives to Swiss franc loan conversion


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Report: Poland weighs alternatives to Swiss franc loan conversion

Polishauthorities have begun weighing other options to help the holders of Swissfranc-denominated loans, although earlier plans to force banks to convert theloans into Polish zlotys are still being considered, sources told Reuters.

SlawomirHorbaczewski, an adviser to Polish President Andrzej Duda, told the newswirethat one option under discussion would be to allow Swiss franc mortgage holdersto surrender their mortgaged homes together with the loans, while allowing themto rent and live in those properties. Another possibility would be to obligebanks to return the costs of currency conversions earlier paid by Swiss francmortgage holders.

Thepresidential team is working on new proposals, which are expected to beannounced by the end of May, the newswire said.

Dudaproposed the forcedconversion of foreign-currency mortgages in January, and the Polish FSA laterestimated that the proposal could cost the banking sector over 100 billion zlotys in aworst-case scenario.

TheFSA also noted at the time that under current regulations and financialreporting standards, lenders would not be allowed to spread the costs of the proposalover time but would have to book all of the costs in one year.

"Thereis a need to find a way to redenominate currency loans while ensuring theeffect isn't accumulated in one year, but, say, over 30 years — 1.5 billionzlotys per year," presidential adviser Jaroslaw Mielcarek told Reuters. Anothersource told the newswire that the government may try to address this issue bytransferring franc mortgages from bank balance sheets into a special purposevehicle that would issue bonds.

As of May 5, US$1 wasequivalent to 3.88 Polish zlotys.