bullfrog
13 Sep 2011
Law / Why is US $ getting so high or Polish zloty falling? [60]
The figure of 54% quoted by LK is correct, but the statement above is wrong. CHF mortgages are not indexed on the WIBOR but on the CHF LIBOR, which went plunged 2 years ago following the 2008 crisis and had remained since in the region of 0-0,25%, to which you need to add the margin taken by the Bank. So in the period 2008-late 2010, the rise of CHF/PLN was offset by a decrease in interest rate paid by the client (if you count a 150 bp margin for the bank, that would be from ca 4% to ca 2%). The recent bout of CHF appreciation has caused much more difficulties because CHF rates cannot fall lower (not much room left!) and therefore the impact of the rise is fully felt.
If so, we'd already be in a meltdown as the WIBOR adjusts those borrowers' payments UP. My understanding is that loan payments taken out in Franks are re-calculated on a 6-month WIBOR (warsaw inter bank offer rate) rate between banks and then a 2 or 3-month rate for individuals. This means individuals do see increases, but it's not like one day it's 500 zloty the next month it is 1000. Obviously many people would default.
The figure of 54% quoted by LK is correct, but the statement above is wrong. CHF mortgages are not indexed on the WIBOR but on the CHF LIBOR, which went plunged 2 years ago following the 2008 crisis and had remained since in the region of 0-0,25%, to which you need to add the margin taken by the Bank. So in the period 2008-late 2010, the rise of CHF/PLN was offset by a decrease in interest rate paid by the client (if you count a 150 bp margin for the bank, that would be from ca 4% to ca 2%). The recent bout of CHF appreciation has caused much more difficulties because CHF rates cannot fall lower (not much room left!) and therefore the impact of the rise is fully felt.