Hot night, August 5th dream come true Midsummer Night frankowiczów and blackest nightmare bankers. Diet unexpectedly adopted the law on currency translation of foreign currency loans to gold in the shape of a much more advantageous for frankowiczów than she PO, author of the project.
Sorry ultimately prove beneficial conversion loans no longer need. And at least four reasons. The key may be the opposition of the Senate to the solutions adopted by the Sejm, the unfavorable exchange rate of the franc at the time of drawdown, a possible speculative bubble burst and raising interest rates in Poland.
To the rescue frankowiczom
The original proposal involved Platform possibility of converting francs for the buck at the rate of conversion – with half of the difference between the value of the loan after conversion and the amount of debt, we would have at this time the borrower, if the borrower in US dollars, would be discontinued. This means that the cost of conversion will share fifty-fifty customers and banks. AFTER she wanted initially to their credit they could przewalutować owners of apartments with an area exceeding 75 square meters. and houses a maximum area of 100 sqm. This restriction, however, does not apply to families with three children. At the same time the offer was not addressed to persons with another apartment or a house outside the property on which the loan was taken out in the currency. In addition, the ratio of loan to collateral value would exceed 120 percent.
Once the project was sent to the Parliamentary Committee on Public Finance MEPs proposed changes increase the maximum area of housing up to 100 sqm., and the house – 150 sqm. In addition, loan to value ratio of the collateral value was reduced to 80 percent. These were amendments SLD, which the Commission decided to recommend to the Sejm. But the Alliance has also suggested other, more far-reaching, correction, suggested that the Commission rejected. One of them was a proposal for the distribution costs of conversion is not 50/50, but 90/10 at the expense of the banks. Contrary to the recommendations of the Commission’s parliament adopted the amendment.
But that’s not the end of the trip franc by the twists and turns of politics and the economy.
The Senate can say “no”
The Sejm vote on an amendment providing for the redemption of 9/10 SLD conversion costs was attended by 423 deputies. The vote was 243 against 179, 1 abstention. The Sejm amendment adopted by the PSL. 172 deputies voted against the Platform, 8 were for. In the PSL voted against only two deputies, and for the entire opposition was 37 – the Law and Justice (128 in favor, 0 against), the Democratic Left Alliance (31 for, 0 against), the United Right (15 for, 0 against), Palikot’s Movement (10 per , 0 against), White-Reds (3 in favor, 0 against) – supported the amendment. Non-attached Members be divided – 13 were in favor and 5 against.
then voted on the whole bill. Despite the changes the PO did not want to break off before the election, his own gift for frankowiczów, so voted for. The project was supported by 281 deputies, 2 against and 150 abstentions. They were mainly members of Law and Justice.
The law also thanks to the votes of the PO, took shape, the platform itself is not He wished. But now the project will go to the Senate, which can make amendments to it, accept without changes or reject it in its entirety. PO has 58 senators in the Senate, and the PiS 32. In benches of the Upper House sits 4 more independent senators (forming wheel Independent Senators), 2 senators PSL, 2 senators and 1 senator non-members of the United Right. Arithmetic is therefore on the side of the Platform. PO has already announced that it will restore the distribution of the cost 50/50. Senator Kazimierz Klein estimated that what they did MPs, is “irresponsible behavior and related emotions and politics.” Senators want to restore the previous records, because otherwise the banks would be burdened with additional costs estimated at 7-8 billion zł. According to the original proposal AFTER supposed to be a cost of approx. 9.5 billion zł. However, even if the Senate adopts the amendment, which can become 2 September, Parliament can not accept absolute majority.
Senate to the bill adopted by the the Parliament may propose amendments, adopted without changes or reject in whole
– There is no doubt that the main point of dispute in the Senate will fix the SLD talking about the reversal of the 90 per cent. currency conversion costs on banks. I have appealed to the senators for not changed. It is not true that the deputies, according to Senator Klein behaved irresponsibly. Irresponsibly preserved banks offering foreign currency loans, and they should bear the greatest costs – said in an interview with Onet Vincent Elsner, a member of the Democratic Left Alliance and the author of amendments to the Law Alliance francs. – The Act assumes 50/50 split of conversion would benefit more than ten percent frankowiczów. In the division of 90/10 will be approx. 80 per cent. Specially I kept these symbolic 10 percent. conversion costs charged to frankowiczów to people who took out loans in US dollars, do not feel wronged – notes Elsner.
– For sure the banks will firmly convince senators to reject the amendment and return to split 50/50. If this happens, PO once again show that takes the side of the banks. When a project comes back to Parliament, I will try to convince deputies to the Senate they rejected the amendment and retained 90 per cent of cost-sharing. up to 10 percent. There will count individual voices. The Senate amendment will be rejected if MEPs vote as voted on August 5. I can not imagine that the PiS opted for a worse option for frankowiczów. But we do not know how to vote in the PSL. If the PO convince the PSL, also supported the amendment to the Senate, it will return a 50/50 split. When it comes to the PO, it will be difficult to explain to vote for the amendment of the Senate. Law Franková was to be a symbolic gesture before the election, and has become a party Ewa Kopacz tough nut to crack. Leaving the face for the PO would be doing nothing. Senate without amendment Act come into force in its current form. I definitely would solve the problem loans frankowych in Poland – says deputy SLD.
key moment to take a loan
Jaroslaw Sadowski, principal analyst Expander Advisors, believes that regardless of the option, 50 / 50 or 90/10, everyone will gain something. – Conversion is liberation from foreign exchange risk. In most cases, also decreases the debt denominated in dollars. However, there are cases where the borrower can estimate that such conversion does not pay him. In some cases, the consequence of conversion and redemption of part of the debt will increase the amount of the installment. For some, this is an acceptable cost, but not for others. It depends on how much depends on the borrower to free themselves from currency risk and what are the proportions of the increase and decrease in installment debt – says the expert.
– You can indicate that the higher the rate of payment of the loan, the less it pays to take advantage of this solution. In the case of variant 90/10 conversion is less favorable, the franc launch date of the loan is higher than 2,60 zł. Over this course the new installment is in fact becoming higher than at present, and discontinued the debt becoming lower. In the case of variant 50/50 such a threshold is roughly at the level of 2,20 zł – notes Sadowski.
The day after the vote in the Sejm shares of banks recorded huge declines
For example, given credit for the 300 thousand. zł for 30 years, launched in February 2009 at odds of 3 zł. 90/10 variant will make the debt fall by approx. 21 thousand. zł, but installment will grow by 193 zł. – A borrower can judge that and so worth it, and another that he was not worth it – notes the analyst.
In a variant 50/50 after conversion of the same loan would appear that installment will grow by more than 200 zł. In return the debt falling leaves only less than 1.4 thousand. zł. – The operation turns out to be so completely unprofitable – says Sadowski.
Conversion may also be completely unprofitable operation in If bubble burst, which some seek in the course franc.
bubble franc
– We are against the franc speculative bubble – said recently in parliament NBP President Marek Belka. – How is it possible that so tiny economy (Swiss – ed. Ed.), Much smaller than the Polish, was the basis of one of the major currencies of the world? But to keep the exchange rate, the Bank of Switzerland had at some point probably print 60 billion francs a month. Once the bubble can burst. I do not know whether to burst and when it breaks, but you may find that the franc could weaken. Then those borrowers, which today we ask przewalutować credit for gold, they will come and say, ye have tricked us again. Once, as ye have us let francs, and once, as ye have us let the buck. Damn. Not good – said Beam.
With this, the franc is overvalued and that its value can melt, right many analysts. Among them is the Konrad Bialas of TMS. – It shows the indicators clearly weakening exports, which falls on economic activity. Introduced by the Swiss National Bank (SNB) negative interest rates do not translate into credit stimulus for the economy, and more Swiss companies are busy downsizing than investments. Pessimistic picture of the economy indicates the need for depreciation of the currency, which must eventually take place – says Bialas.
introduced by the National Bank of Switzerland negative interest rates do not translate into credit stimulus for the economy
– Bubble maybe I’m not a good word to define the situation franc, it does not change the fact that the SNB’s monetary policy is becoming more painful for the institution maintaining franc deposits and recent statistics show that it increases the outflow of capital. Thus, in the longer term, the franc should weaken and so are our forecasts. We expect depreciation of the zloty against the Swiss franc to 3.80 at the end of December, but a year later it should be 3.51. If you take into account the current forecasts for the franc, the decision on currency translation mortgage can actually appear to be unprofitable – says Bialas.
different opinion while Matthew Adamkiewicz, an analyst HFT Brokers. – The Swiss franc is not overvalued and as a rule the currency is worth that much how much investors are willing to pay. You can even say that until now the value of the franc is correct, after the years was kept at an artificial level by the SNB. I think now the franc is at a relatively neutral levels, and therefore do not expect major movements of the currency in the coming months. This means that the franc to gold all the time should be around 3.90 – believes Adamkiewicz.
However, even if no bubble will not burst, there is one good reason why conversion does not have to be particularly successful event.
Feet Up
Jaroslaw Sadowski Expander considers it quite likely that interest rates in Poland will soon start to grow, and with it przewalutowanych installment loans. – Feet in Switzerland are much lower than ours. They will not rise until the franc is so strong. Even if the franc remains at current levels, then a few years przewalutowanych loan repayments can therefore be considerably higher than those for this solution have not decided. Of course it is also possible the opposite scenario. If for some reason the franc will rise to eg. 5 or 6 zł zł, those who remained at the foreign exchange loan may regret it – he says.
The fact that the Monetary Policy Council in Poland sooner decide to raise interest rates than the SNB is convinced Konrad Bialas from TMS. It points out, however, that this is not the only parameter that interested borrowers. – Persons who are interested in selling the property on which there is a mortgage, with the value of the loan exceeding the value of the property they can not sell. Conversion will allow them to sell. The second group of people interested in currency conversion are those simply tired of tracking the franc. With the proposed distribution of surplus 90/10 conversion for them will be extremely encouraging. But is profitable? Personally, I am a different opinion – he concludes.
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