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.
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.
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.