Poland will not force banks to convert franc denominated loans
15:38
The head of central bank, Adam Glapiński, said at a joint press conference with presidential officials that it is not possible in present conditions to force banks into a one-off conversion of franc denominated mortgage loans as it would pose a threat to the Polish currency.
"But an FX conversion should come at the proper time and will come to pass," Glapiński said.
Instead, Poland will force banks to refund a portion of FX spread, a move which will cost banks around PLN 3.6-4 billion. The refunds will be limited to PLN 350,000 and will be calculated to allow banks to retain a 0.5 percent "fair" margin. Franc-borrowers will be eligible to get compensation to the point in 2011, when a new law gave them rights to exchanges currency outside their lender bank.
"We are starting with spreads, but we are not ending there," Maciej Łopiński, a minister at the Chancellery of the President said. "This is the first step." He added that banks will have one year to voluntarily solve the FX mortgage loan problem before the state will take steps towards mandatory solutions.
Adam Glapiński added that the market regulator can "significantly increase capital buffers for those FX loan portfolios, to make preserving them unprofitable," which would force banks to "offer terms attractive for clients."
The original version of a presidential draft bill assumed the conversion of FX mortgage loans, which would cost banks around PLN 70 billion. After Tuesday's conference, banks' stock prices went up significantly.
