WARSAW, 2 July (Reuters). The legal risk associated with foreign currency mortgages has become the main threat to the stability of Poland’s financial system, Central Bank Governor Adam Glapinski said on Friday.
Thousands of Poles took out loans in Swiss francs over a decade ago to take advantage of lower interest rates, but faced much higher costs when the value of the Swiss currency surged. Many have filed lawsuits against banks over provisions they believe are offensive.
Banks and mortgage holders were left in limbo in May when the Supreme Court delayed making recommendations on how lower courts should handle cases.
The court asked institutions, including the central bank, the financial regulator KNF and the ombudsman, to provide opinions on the matter.
“The legal risk of the portfolio of loans in foreign currency has grown and has recently become the main threat to the stability of the domestic financial system,” Glapinsky said, answering the court’s questions.
“Today, the lack of a unified court practice creates uncertainty that harms both banks and borrowers, as it makes it difficult for financial planning for the future for both parties.”
The next meeting has not yet been scheduled, but the first Chief Justice of the Supreme Court, Malgorzata Manovska, announced that it will take place in September. (Reporting by Alicia Ptak; editing by Philippa Fletcher)