Raportul anual al FSUG (Financial Service User Group – Grupul Utilizatorilor de Servicii Financiare) contine un articol scris de presedintele AURSF, Alin Iacob, pe tema creditelor in franci elvetieni. Redam mai jos articolul, integral, in limba engleza:
Foreign Currency issues (Alin Iacob)
The hidden poison: Swiss Franc loans for households
Across a number of Central and Eastern European Member States, consumers were lured into a trap, because providers did not tell them of the very high exchange rate risk of Swiss Franc loans. Instead, banks initially presented the loans as a very good deal, with the rate of interest much lower than for similar loans in the local currency. Banks also asserted that the Swiss Franc was very well known for its stability. But, in fact, this information was misleading. Between 1995 and 2005, the EUR/CHF exchange rate varied between 1.71 and 1.4522. And bankers should also have known that the Swiss Franc was likely to appreciate, especially in times of crisis. Were banks aware of all those risks passed on consumers? There is information that, in at least in one case23 (BNP Paribas Personal Finance), the top management of the bank discussed potential risks internally, but did not provide information to consumers. This is likely to be the case with many other banks, even if it is not so easy for us to demonstrate. What it appears to be very clear now is that this product was offered through misleading advertising campaigns and, as a consequence, consumers were totally unaware about the huge exchange risks assumed.
It is also debatable whether banks should have sold these loans to consumers at all. A report issued by the Central Bank of Switzerland24 showed that, while the Swiss financial market was substantially involved in refinancing Swiss Franc lending within the euro area, this was not the case outside. Data from the local supervisors suggests that the banks outside the euro zone refinanced the majority of their Swiss Franc assets with off-balance-sheet items, most of them through currency swaps, in the majority of cases through their parent banks. Moreover, the loans were disbursed, almost completely, in local currencies. The question is, why were hundreds of thousands of consumers, especially from Central and Eastern Europe exposed to an exchange rate risk for a currency almost never used in those countries and not even present in the balance sheets of the local banks? Was this responsible lending? Certainly not.
Of course, it is interesting to raise other questions: where were the local central banks, and why didn’t they do anything to restrict this product? Why didn’t they discourage banks from offering this kind of loan to consumers? And where was the European Central Bank, which is now so critical of the measures taken by national authorities (most recently of Croatian law
on converting Swiss Franc loans to Euro), when these loans “flooded” markets in Central and Eastern Europe?
Senior bankers are now talking about the mistakes and the poor behavior of banks, before the financial crisis, regarding this type of product. But where were these voices when these
loans were first sold? The impact on consumers has been catastrophic. Many are now paying now instalments at an exchange rate of around twice the original rate. Some of them are paying even higher interest rates than this. And this is happening in an environment heavily affected by the crisis, with incomes in sharp decline. Consumers have outstanding debt just 10 to 20% less than the original amount of the loan, because in all those years the monthly instalments were composed mainly of interest, commissions and fees. And banks didn’t propose any solution for a conversion from Swiss Franc to local currencies or to EUR, when it became clear that the Swiss Franc would appreciate considerably. Banks covered the risks, at least in part, with diverse hedging operations. But consumers didn’t have this opportunity; they were totally exposed to this “tsunami”.
The fate of hundreds of thousands of Central and Eastern European families (especially from Poland, Romania, Croatia and Slovenia) is now very tough. In many cases, they simply cannot pay their monthly instalments, which for some is higher than their monthly income. Banks, governments and politicians from all over the Europe now have a very hot potato in their hands. How they will manage this situation? Will banks become responsible, and accept that they should share the burden of outstanding debt with consumers?
Unfortunately, there is little sign of such behaviour. On the contrary, banks are very reluctant to accept any responsibility for manufacturing and promoting these toxic loans. And, in those
Member States where politicians decided to force them to take responsibility and share the burden with consumers through local laws (Poland, Croatia), the banks have warned that
they will take action against those laws in local or international courts. In this case, maybe it is time for action at EU level. For consumers is almost impossible to find out if all the prudential and business rules were respected when this toxic product was manufactured and sold, if it was proper for banks to launch a loan in a foreign currency, even if they didn’t have it in the balance sheets. We can just raise some questions, express our doubts and mention our concerns to EU decision makers.
But if we really want to avoid these things to be repeated soon, it is essential to establish a Task Force at EU level and to launch an investigation on this topic, to help everybody to
understand what exactly happened, who is responsible for the damages suffered by consumers, if there were breaches of the EU law on a large scale and to identify concrete solutions for debtors, especially for those with payment difficulties. In almost every relevant EU document, consumers are presented in the heart of the EU policies. Let’s try now to convert these very generous words in concrete actions for the real benefit of consumers. It’s time for action, let’s do it!