NBP source francs for private banks. So the government wants to secure gold – Interia

The government found a way to secure the gold? / © PantherGuide

In June, a team of experts Office of the President is expected to present a new proposal for the restructuring of foreign currency loans. Feedback from team members that the security of the whole process would take care of the NBP. Could provide currency – usually Swiss francs – commercial banks. You will need to meet its obligations to other institutions.

Normally, loans are funded by customer deposits, but Polish banks do not collect deposits in francs. So it had to borrow from other banks, often their foreign exchanges. Simply put, then they sold it for gold, which pay out to customers.

Foreign currency loans at a rate lower than the market would mean that the banks will not be enough money from the repayment of customers to buy as much francs, as they need to pay your debt. They would have to spend more than dostałyby in the form of repayments, and so arise loss. KNF, reviewing the first presidential draft francs, has calculated it at approx. 70 billion zł. It and the second problem: the mass conversion would mean a large demand for the currency in a short time.

– From the technical side, the banks will have to buy francs, to give them to those who finance them, or terminate hedging transactions exchange rate. At the same time banks’ assets (loans) will change in the zloty. At this scale of operations could affect the currency market. Franki could then “substitute” the central bank: first enter into a contract with the Swiss National Bank (SNB) to exchange euros for francs and then sell them Polish banks in exchange for gold. The whole operation will not necessarily require the physical transfer of funds, only swap – says “Dziennik Gazeta Prawna” Marek Dietl of the Sobieski Institute, a member of the team of experts in the Office of the President. Reserves at the same time, it was his opinion.

The solution resembles agreement of November 2009. Between the NBP and the SNB. Swiss National Bank sent the currency of our bank in exchange for the euro, and the NBP could transmit it to commercial banks in exchange for gold. This was to eliminate the risk of financing, among others, foreign currency loans at the beginning of the crisis.

The solution, in which the Swiss currency further distributed to commercial banks from the SNB via NBP, has another advantage: it does not involve foreign exchange reserves of the Polish central bank. Without regulating the NBP in this way, and so he could be forced to reach for the provision and supply of francs commercial banks, if the high demand in the market lacked liquidity. This would have negative consequences for the economy.

Grzegorz Osiecki, Marek Chądzyński

17 May 2016