FX mortgages threaten Poland’s financial system, central bank governor says

The legal risk connected to foreign currency mortgages has become the main threat to the stability of Poland’s financial system, Central Bank Governor Adam Glapinski said on Friday.

Thousands of Poles took out loans in Swiss francs more than a decade ago to take advantage of lower interest rates but faced far higher costs when the value of the Swiss currency shot up. Many have taken banks to court over clauses they say are abusive.

“The legal risk of the portfolio of foreign currency loans has grown and has recently become the main threat to the stability of the domestic financial system,” Glapinski said in answer to questions from the court.

The next sitting has not yet been set, but the First President of the Supreme Court Malgorzata Manowska has said it should be in September.

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