KNF head believes presidential FX bill will generate significant costs

The presidential bill on FX spread returns aimed at helping CHF mortgage borrowers would “solve nothing”, but generate a “significant” cost to the banking system, stated Andrzej Jakubiak, the outgoing head of the Polish financial regulator KNF. “For several banks it could result in a loss,” Jakubiak head said, noting that banks generating losses have to prepare recovery programs, which entitles them to exemption from the banking tax “and the budget will get less money”. He believes the money paid out in spread returns could be better spent. "Every billion kept in the banking system, increasing its own capital, enables generation of at least PLN 8 bln credit," he said. “Especially since we don't see a problem with repayment of CHF loans. The installments are still lower than for PLN loans.” The government plans to launch the FX mortgage relief program with a partial spread refund, estimated at PLN 3.6-4.0 bln, and then start turning up the pressure on banks to restructure housing loans.