Polish regulator blames the strengthening of the Swiss franc for problems with foreign currency loans | WKZO | All Kalamazoo

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WARSAW (Reuters) – The problems associated with mortgages in Swiss francs taken in Poland mainly arise from the increase in the value of the franc, and not from the provisions of the contracts, the Polish financial regulator KNF said on Thursday in an opinion filed with the Supreme court.

Banks and mortgage holders were left in limbo in May when the Supreme Court delayed making recommendations on how lower courts should deal with foreign currency loan cases, prolonging uncertainty about how the underlying risk would be addressed. financial sector.

Thousands of Poles borrowed in francs more than 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.

“(The problem) mainly arises from changes in the exchange rate of the zloty … and massive assumptions on the part of customers (knowingly or

unconsciously) foreign exchange risk on the horizon of several decades, and not legal aspects related to the structure of contracts, ”said the KNF.

In December, the KNF proposed an out-of-court settlement plan, in which loans would be treated as if they had been taken in zlotys, but most banks are awaiting a Supreme Court decision before deciding on further action.

On Thursday, the KNF reiterated its call for a “peaceful” settlement of disputes between banks and mortgage holders.

He reiterated that he estimates the cost of his settlement plan at PLN 34.5 billion ($ 9.05 billion). According to KNF, in the worst-case scenario for banks, the cost of court cases could be up to 234 billion zlotys.

(1 dollar = 3.8140 PLN)

(Reporting by Alan Charlish and Pavel Florkevich; editing by Emilia Sitol-Matariz)

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