East Europe banks face pressure over Swiss franc loans
Governments, worried about political risks from the loans, are pushing lenders to provide costly relief for borrowers
Warsaw
WHEN the Swiss franc surged at the start of the year, there were dire predictions of a wave of debt defaults by the hundreds of thousands of borrowers in eastern Europe who had taken out mortgages in the currency.
Three months on, there is no evidence of a widespread increase in the level of non-performing Swiss franc loans, according to checks by Reuters with banks in the worst-affected countries in the region, and other data.
The pain for banks is coming instead from another source - governments, worried about the political risks from the Swiss franc loans, are pushing lenders to provide costly relief for borrowers.
The pressure is greatest in Croatia and Poland, the two countries with the biggest portfolios of Swiss franc mortgages and whose governments face close-fought elections this year. "The political calendar is merciless, and this is why politicians are raising the Swiss franc issue," said a Polish bank executive, wh…
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