Poland passed a measure to provide some relief to homeowners who took on mortgages in Swiss francs by limiting banking charges as the Alpine currency soared to fresh historic highs against the Polish zlotys on Tuesday.
The new law signed into effect by President Bronislaw Komorowski on Tuesday will allow debtors to pay monthly payments in foreign currenciesobtained outside their bank to avoid often high conversion charges, or spreads.
"The updated law... will at least partially alleviate the effects of crisis for some debtors who took on loans in the Swiss franc," Komorowski said.
Prime Minister Donald Tusk has been reluctant for the government to step in, but with an eye on the October parliamentary election, agreed to support the efforts by junior coalition partner, the agrarian Peasant Party (PSL).
Its leader, Economy Minister Waldemar Pawlak, said he hoped the new law would help to reduce spreads on mortgages from 10-12 percent to 2-3 percent.
But Tusk's centre-right coalition stayed away from more radical solutions, such as a law adopted by Hungary that allows some debtors to restructure their foreign-denominated loans into local currency at favourable terms.
Ahead of the collapse of Lehman Brothers and the subsequent financial crisis, more than two-thirds of new mortgages taken out by Poles were in Swiss francs. Currently, a similar proportion of new house loans are taken out in local currency, with the rest mainly in euros.
Polish banks hold Swiss-denominated loans worth some 144 billion zlotys ($50.3 billion), according to the financial regulator KNF.
The head of one of Poland's banks that was among the country's leaders in foreign-denominated mortgages said last week the recent surge of the franc had increased monthly payments for customers by as much as 40 percent compared to when they took the mortgages out.
The Swiss franc , fueled by a flight to more secure assets in the face of growing concerns over the global economy, has gained more than 20 percent against the Polish zloty since the beginning of July.
According to JP Morgan, the average loan in Swiss francs was taken out at a level of 2.3 zlotys to the franc compared to levels of around 3.86 on Tuesday.
($1 = 2.861 Polish Zlotys)
The new law signed into effect by President Bronislaw Komorowski on Tuesday will allow debtors to pay monthly payments in foreign currenciesobtained outside their bank to avoid often high conversion charges, or spreads.
"The updated law... will at least partially alleviate the effects of crisis for some debtors who took on loans in the Swiss franc," Komorowski said.
Prime Minister Donald Tusk has been reluctant for the government to step in, but with an eye on the October parliamentary election, agreed to support the efforts by junior coalition partner, the agrarian Peasant Party (PSL).
Its leader, Economy Minister Waldemar Pawlak, said he hoped the new law would help to reduce spreads on mortgages from 10-12 percent to 2-3 percent.
But Tusk's centre-right coalition stayed away from more radical solutions, such as a law adopted by Hungary that allows some debtors to restructure their foreign-denominated loans into local currency at favourable terms.
Ahead of the collapse of Lehman Brothers and the subsequent financial crisis, more than two-thirds of new mortgages taken out by Poles were in Swiss francs. Currently, a similar proportion of new house loans are taken out in local currency, with the rest mainly in euros.
Polish banks hold Swiss-denominated loans worth some 144 billion zlotys ($50.3 billion), according to the financial regulator KNF.
The head of one of Poland's banks that was among the country's leaders in foreign-denominated mortgages said last week the recent surge of the franc had increased monthly payments for customers by as much as 40 percent compared to when they took the mortgages out.
The Swiss franc , fueled by a flight to more secure assets in the face of growing concerns over the global economy, has gained more than 20 percent against the Polish zloty since the beginning of July.
According to JP Morgan, the average loan in Swiss francs was taken out at a level of 2.3 zlotys to the franc compared to levels of around 3.86 on Tuesday.
($1 = 2.861 Polish Zlotys)
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