I turned to the NBP President Marek Belka to convene the Financial Stability Committee to consider how to solve the problem frankowiczów – says the head of the Financial Supervision Commission Andrzej Jakubiak after the KNF a negative opinion on the President’s bill.
According to Jakubiak, the KSF together with the Polish Banks Association should patronize the creation of a new project that would solved this case.
No aid for all frankowiczów
the head of the Financial Supervision Authority also believes that the new solution should be addressed only to those borrowers of foreign currency, who are the most vulnerable, that is, eg. their loans have a high rate of LTV (ratio of the mortgage loan the value of housing) and the DTI (ratio of the amount of debt in relation to income).
Critical opinion KNF ws. Act presidential is reliable. But it will be next
Jakubiak ensures that the critical opinion of the Financial Supervision Authority on a draft presidential was based on reliable data contained in the questionnaires received from the banks. Also accepts that at the request of the Presidential Office, the commission sent another questionnaire to banks, which recorded more questions. Based on these surveys KNF prepare another position on the presidential project.
Here’s the full interview with the head of the Financial Supervision Authority
PAP Minister Henryk Kowalczyk complains KNF policies in the preparation of the opinion to the presidential bill francs . It also states that the committee comment to the presidential project is “inappropriate” and that “mixing presidential project of the mud is not worthy of comment FSA”.
ZR. PAP
Andrzej Jakubiak: First, in our study there are no words that could be considered as “mixing with the mud.” Secondly, this material we tried to avoid anything that could have a political aspect. Such accusations are nothing new anyway, if the data that do not fit into a certain concept. It is not associated only with the current government. How ever criticized changes in the OFE, were also statements of the Minister of Finance, that the FSA “exceeded its powers”. Charges the Minister Kowalczyk has not been defined in any way. I guess it’s about the last sentence in the report summary.
PAP: That the project “in an extreme scenario could cause the financial crisis?”
A.J .: Yes. The Minister Maciej Łopiński on behalf of the President asked us to estimate the effects of the bill on frankowiczów and we did it. In the market I do not see a special polemic with substantive content. Well, to those that talk, they knew not only the material, but also the responsibilities of the Financial Supervision Authority. The Commission is responsible for the safety of funds held in bank accounts. This is directly due to the Banking Law. The issue of ensuring the safety of these measures, the Commission has a mandate, and even a legal obligation to speak. This is not any political action. Political action would be if we had hid his head in the sand. And we have shown what are the consequences when it comes to the results of banks, a possible entry into force of this Act.
In the most likely scenario, resulting from the Act for the base variant of exchange rates in six banks capital ratio would fall below the statutory limit of 8 per cent., And five banks would own funds below 50 percent. the regulatory minimum, and in the light of the regulation should be abolished. The assets of these banks is 344.7 billion zł and guaranteed deposits 137.8 billion zł. Imagine that one of these banks gets into trouble and must start the procedure for the payment of guaranteed funds, what happens next? The BFG is now about 10 billion zł own resources. You would need to run a system of guaranteed payments. The case of SK Bank Wołominie gave only a taster of how this would impact on other banks.
We show simply that there is a real risk for the transmission problem some borrowers on all the others. We say that this could undermine confidence in the system and trigger the financial crisis, because it is. I can not imagine, too, that if this is the case, the state would not have to intervene. But the question is, at what cost.
PAP: They are, however, formulated an objection to the methodology. I understand that the KNF sent to a bank survey. Meanwhile focusing frankowiczów association “Stop Banking lawlessness”, he believes that banks could manipulate data and does not represent the whole truth, inflate losses etc. Especially since they knew what to KNF needs it. Do you know that the data contained in the questionnaires is reliable and credible?
A.J .: The data are credible. Those who want to discredit the material claimed that it is based on what the banks filled in some polls. It can be associated with the interviewer, standing on the street, who say what you want and it crosses marks the answer. Nothing could be further from the truth. Presidential Office asked us for information that is not available in regular reporting, so we had to prepare a questionnaire. We have just such a proven method, and all supervision in the world in this way they operate. Similarly, all those who collect statistical data. After reporting a monthly, quarterly, annual, which is sent to us and NBP, this is also a form of survey, only cyclical. Many of supervision in the world based solely on reporting, and we are also still a part of the inspection. So if anyone tried to cheat us, we have the strength and the means to go to the bank and find out what is true and what is not. And banks know this.
PAP: So you have instruments to verify the data submitted to you in the polls?
A.J .: We. And it’s also just the fact that they can be verified by inspection. In these polls they were mounted operation checks. So it is not so that you could write anything and we do not catch. We can verify the data. Eg. Costs associated with spreads were assessed independently for approx. 15 billion zł, considering that there are contracts that have been completed, but in the light of the provisions of the Act or to its subject. Discrediting the public of these surveys is a misunderstanding, and only discredits the people who are doing it. We realized that these amounts will be shock, as well as how this discussion can take place. That’s why we wanted it to in the report was the least valuation.
PAP: For all the question of the Presidential Office responded?
A.J .: Not yet, because there were two letters from the office. The first was a letter, which was passed on January 15 together with the project. It was quite short and contained a request to show the financial implications of the proposed solutions. Then yet we received a patch from the office, noting that this calculator, exchange rate, specifying the fair was a mistake. The second letter was dated February 2, ie. After it has already sent a questionnaire to the banks. The first answers were based on the first survey as soon as possible to pass information about the effects of the project. A second letter from the office was the basis to send another questionnaire, which is currently being revised. In my opinion, however, this second survey will have no impact on the calculation of the effects of the proposed solutions, as the questions contained in the letter of February 2 referred to the situation of the past.
PAP: What questions were in this second letter? Whether it’s questions about the results of banks on loans broken down by the result and commission, as the change to the index of bank debt, if foreign currency loans will be considered in PLN at the rate of borrowing and deposits of banks which grant loans in foreign currencies?
AJ: Yeah, that these questions.
PAP: When can we expect a response from banks and another position KNF?
AJ: How the data will be ready and verified that it pass.
PAP: If this project is bad, what do you do with frankowiczami? A year ago, you proposed specific solutions, but have not entered into force due to the opposition of banks. Today you have any idea what to do?
A.J .: The problem is not the current default rate. Besides the presidential draft does not treat borrowers frankowych same. Even those who have taken a loan at the same time, in the same bank under the same conditions, with one difference – the length of the loan – are treated differently. The so-called. course just makes a particularly preferred are those which contain short-term contracts. This course sometimes differ by 50 cents to one franc. This means that the higher costs borne by those who took loans for long terms, which is mostly less affluent, with lower creditworthiness. There is also the issue of return of the apartment, which provides for the project. And as someone has credit, which is 160 percent of the housing and gives this apartment, the bank must immediately enter each of these 60 per cent. the costs, and it is not known how many will lose the maintenance and sale of apartments.
Those who say that nothing will happen, because banks have not known how much money, they forget that everything is done at the expense of depositors. I have not seen the borrower, which would have fallen due to the bankruptcy of the bank, but I have seen many depositors who have experienced tragedy when such bankruptcies. This applies not only consumers, but also businesses, and institutions such as hospitals.
PAP: Is today a law Franková is needed at all?
AJ: It was autumn bill his passing was quite close, but was spoiled by the Member (Vincent) Elsner (as amended SLD most of the costs of conversion loans have borne the banks-PAP). Today we have been operating under other conditions. You have to remember that it is eg. The bank tax, which removes sector almost 4 billion profit a year. The space is so less. Remember that the cost to solve this problem rozkładałyby on the banks asymmetrically. Banks that do not grant foreign currency loans would pass unscathed, but would also be those that would be very heavy.
How to solve the matter now? I think this issue is to some discussion at the meeting of the Financial Stability Committee, together with the banks. You have to think of the overall solution. Today, the problem is mainly loans with a high LTV. If we look for solutions somewhere, persons covered by it should meet my mind two conditions: LTV above 100 percent. and DTI in excess of 60 percent. This would allow stick to the principle that it helps to those who have real problems. The condition would also be mandatory conversion of the division of accumulated exchange rate risk between the two parties – the bank and the borrower. This idea must, however, have wider support.
PAP: So be proposed eg. The KSF, in agreement with the PBA?
AJ: Yes, the KSF is an appropriate body, because there is, and finance Minister and president of the NBP. The government must have full control over it, if it would be a statutory solution. Because if there will be political support, the project may go out of parliament in such a shape that will lead to real trouble.
PAP: This can be understood as you call for it to matter in such a way to solve?
AJ: Yes, I turned to the NBP President Marek Belka, who chairs the KSF as supervision makroostrożnościowemu the convening of the Financial Stability Committee.
PAP: I recently have been deputy finance minister Konrad Raczkowski said that in soon fall a few banks. He paid for this position. The Lord gave his opinion that the banks are safe, that there is no such danger, although the forum bank told you that you can not exclude intentional attempts to cause panic and organized action, which will be calculated at destabilizing the banking system in Poland. Can you somehow develop?
A.J .: For some time, intensifying external attacks, especially on banks having developed online activities. For blocking access to the site go text messages to clients with false information that the bank is in trouble. Today, the dependence of banks and their customers for solutions is very large. With this all seems a case, the criminals also. I do not like to spin conspiracy theories, but you can imagine a situation in which someone from outside depend on that to destabilize the situation in Poland. You can try to hit the financial system, especially if it is heavily dependent on channels of information. Therefore, I believe that we should not foster the atmosphere and express themselves in a way that undermines confidence in banks as institutions that are stable in Poland. This is not the case that someone loves them or not, but banks are accumulated nearly trillion of all of us – citizens, businesses, government agencies and the local governments.
PAP: How do you assess the bank tax?
AJ: in today’s world, the primary source of security building and capital in the banking system is stopped dividends. So the more current costs, the lower the possibility of building safety. When I came to the KNF, the own funds of banks amounted to less than 110 billion. As I was leaving, it will be well above 160 billion. It was a conscious choice. When deciding on dividends detainees knew that the only way to build security. And the smaller the ability to generate profits, the less opportunities to support capital. It must be remembered that every year an average of about 50 percent. profits were retained in this way in the country, which allows you to increase lending. A significant portion of the dividend payment remained in the country in Polish investors, including OFE and investment funds.
PAP: If you would be assessed from the point of view of the macro, or better stop dividend, or impose the bank tax?
A.J .: I think it’s better to stop dividend. Some will say that the bank tax in many countries. Only that it is often form is received by the state budget of what already has put into banks to save them. We have such a situation was not. They are the one hand, contributions to the Bank Guarantee Fund, the second fund disbursements guaranteed by the banks themselves, and this occurs tax. That does not increase security, and has only a fiscal nature. The consequence of this will be a lower capital gain.
PAP: Going back to the speech of Deputy Minister Raczkowski, completely got it wrong?
A.J .: You ask me whether banks will fall? At the moment I do not have any evidence to say that any of the banks is threatened.
PAP: Also in the cooperative banking sector?
AJ: Also there is such a situation to be was to say that we have to deal with the threat of bankruptcy.
PAP, jk
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