As Argentina’s sovereign debt soap opera dragged on, this week saw another legal judgement on toxic debts running into billions of dollars.
Yet while the ruling by Hungary’s supreme court on foreign currency mortgages could cost banks up to €3bn, the full implications are still to be fleshed out. One possibility is the retroactive rewriting of contracts – partially bailing out homeowners who took a failed punt on exchange rates. Read more
It’s not often that banking regulators are on the receiving end of praise. More often than not they’re only noticed after something goes badly wrong. But Poland’s regulator has got a lot right in its approach to foreign exchange mortgages – allowing Polish borrowers to deal rather better with forex loans than their near neighbours in Hungary. Read more
You may have felt sorry for the hundreds of thousands of Hungarians who found out this week that they won’t be entitled to a borrower relief scheme. Don’t. Read more
A ruling on Monday by the Kuria, Hungary’s supreme court, that foreign-currency loans issued in the past decade by local banks were legal, triggered a jump in shares of OTP, Hungary’s largest bank, on the Budapest Stock Exchange. The stock – often seen as a proxy for the Hungarian economy – gained more than 5 per cent to Ft 4,420 in the early afternoon, before easing back to close at Ft 4,311, up 2.8 per cent.
Foreign-currency loans, predominantly in Swiss francs, became hugely popular in Hungary between 2001 and 2008 as borrowers rushed to take advantage of much lower interest rates than those on loans taken out in forint, the local currency. Read more
By Michael Glazer
A Zagreb court last week ruled that eight banks had mis-sold Swiss franc loans to retail clients. All foreign-owned, the banks make up more than 80 per cent of the Croatian banking industry.
The judgement – which is open to appeal – is fascinating in its many implications, not the least of which is the damages banks may have to pay. Read more
Polish borrowers are about to lose one of the last vestiges of the long-gone real estate boom – the ability to borrow lots of money in a foreign currency.
The Polish Financial Supervision Authority (KNF) is preparing to throttle what little remains of forex lending later this year, limiting such loans only to people actually earning euros or Swiss francs. Read more