Supporting of Swiss Franc Borrowers and Sustainability of the Banking Sector in Poland

Michał Buszko ()
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Michał Buszko: Nicolaus Copernicus University in Toruń

A chapter in Finance and Sustainability, 2018, pp 11-25 from Springer

Abstract: Abstract Until 2009 Swiss franc loans gained substantial share among all mortgages in Poland and have created systemic risk. After the crisis and strong revaluation of Swiss currency, the borrowers started to suffer an increased value of installments as well as a high value of debt. Due to that fact, there were proposed various solutions, mostly legal and financial, to reduce the costs and risks related to foreign currency lending to unhedged borrowers in Poland. The aim of this paper is to evaluate instruments, initiatives and solutions used so far or proposed for implementation in Poland to support unhedged borrowers as well as to protect the financial sector against the systemic risk. The author will review the instruments and solutions counteracting fx risk and analyze their potential influence on sustainability of banking sector. The research confirmed that systemic instruments proposed in Poland to reduce the value of debt and risks emerged due to the Swiss franc loans would be unfavorable for sustainability of the banking sector. None of the solutions could solve the problem of the loans in a systemic way. The research indicated that the postulated conversion of the Swiss franc loans into domestic currency would not be beneficial from the social as well as economic perspective.

Keywords: Swiss Franc Loans; Unhedged Borrowers; Franc Loan; Systemic Risk; Polish Financial Supervision Authority (PFSA) (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-92228-7_2

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DOI: 10.1007/978-3-319-92228-7_2

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