President Duda presents FX loan proposal: Mortgages to be spread over years

On Tuesday, President Andrzej Duda presented an amended proposal for tackling the country's Swiss franc loan problem, which provides several options to Polish banks and allows them to spread the mortgages over years. "Poland will help banks spread the cost of FX-mortgage restructuring over time via a combination of unspecified legal schemes and securitization of the outstanding restructured principal," Witold Modzelewski, the official from the Presidential working team told reporters. Modzelewski stressed that neither the central bank nor the state budget will be involved and it will be banks themselves that will create a special purpose vehicle for the securitisation. "Borrowers will have the option of returning their property to the bank and walking away from the mortgage or converting the remaining part of the loan into zlotys using a "fair" rate. Another option for borrowers would be to claim back from banks part of the excessive price that lenders charged them for foreign currencies in the past," the official informed. Earlier, the financial watchdog KNF assessed that the burden for the Polish banking sector of conversing the FX mortgage loans (in line with presidential draft bill) would likely amount to PLN 67.2 billion, while NBP stated the cost of the bill to be at least PLN 44 billion.