Recipe for financial disaster.

Zloty anyone?

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How about the exchange of foreign currency mortgages to Polands zloty with Poland?

Recipe for a financial disaster and it is a wonder that the ‘wicked witch’ from the IMF has not got involved – as yet….

The architect of this not so brilliant scheme – is Polish President Andrejz Duda with proposed ‘draft’ legislation that – if approved – would make ALL banks accept repayments on the equivalent of almost 8 percent of Poland’s gross domestic product in foreign-currency mortgages at a “fair” exchange rate – unless a voluntary agreement is reached between the parties.

 

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As Bloomberg reports.

The planned legislation comes after the ruling Law & Justice party imposed a new levy on bank assets that will drain 4.4 billion zloty ($1.1 billion) from lenders, or about a third of their profits from the last 12 months.

The Polish president’s draft legislation to convert $42 billion in foreign-currency loans into zloty is a “recipe for a banking crisis” that could weaken lending and economic growth, according to central bank Governor Marek Belk?

 

Interesting to see who does come out of the woodwork to thwart this legislation – if it does get passed – then one suspects that it will be subject to legal challenges through the courts.

So not only is Austria on the list of creating the next financial crisis – we can also add Poland.

 

http://www.bloomberg.com/news/articles/2016-01-19/poland-s-planned-mortgage-conversion-is-pure-evil-belka-says

 

Postscript – this proposal is described as ‘pure evil’ – me personally think that it is a political ploy by the new President – as it goes against international contract law.

At least he can say he tried – at the next election.

 

 

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