The Swiss Franc Crisis
Romanians with loans in the Swiss currency are still having difficulties paying their monthly installments and have called on National Bank Governor Mugur Isarescu to step down.
Corina Cristea, 09.02.2015, 14:41
Disgruntled by the soaring exchange rate of the Swiss Franc against the Leu and faced with difficulties in paying the monthly installments for their Swiss currency loans in due time, thousands of Romanians took to the streets in Bucharest and other large cities, calling for legislation that should allow for the conversion of all foreign currency loans to the historic rate plus 20%. The National Authority for Consumer Protection has argued in favour of a solution where both loan takers and banks should share in the risks. Here is the head of this authority Marius Dunca with more details.
Marius Dunca: “There is always talk about the risks banks expose themselves to, such as insolvency and other arguments in their favour. In that respect, I hereby dare all banks and financial institutions involved in the management of the Swiss Franc crisis answer the following question: what solutions are you offering to your clients who risk defaulting on their payments, clients with good creditworthiness prior to the crisis? What kind of solutions do you have in mind for the entire crediting term, not just on short term?”
Speaking on a private television station, Finance Minister Darius Valcov said he expected the National Bank and commercial banks in general to get more involved in this matter, feeling that payment rescheduling remains the best possible solution.
Darius Valcov: “I would like to see the National Bank getting more involved in this issue, all the more so as it has the means. I don’t believe in setting the exchange rate at a historic level, by means of Government Ordinance or by means of a law adopted in Parliament. Everyone with basic knowledge of economics understands the risks befalling Romania, if the worst comes to the worst”.
The rescheduling of payments for Romanians with loans in the Swiss currency would entail a drop in the monthly installments down to 35% in the first two years. In the ensuing period loan takers would benefit from a tax deduction of up to 55 euros per month, with the state stepping in to cover these costs. In turn, the National Bank and commercial banks have called for case-specific solutions, arguing that the solution to convert foreign currency loans would go against the Constitution and incur significant losses. Over 75,000 people in Romania have taken out Swiss currency loans with a total of 14 lending institutions.
