Foreign Currency Loans and Stability of the Banking System in Poland
Journal Title: Central European Review of Economics and Finance - Year 2018, Vol 25, Issue 3
Abstract
The aim of the study was to answer the question whether and to what extent foreign currency loans may pose a threat to the stability of the banking system in Poland. The reason for exploring this problem is the situation in which Swiss franc mortgage loan parties found themselves. The problem concerned not only Poland, but also appeared in Hungary, Spain and Ukraine. The aforementioned countries have adopted various strategies in order to solve this issue. Currently, there is a discussion in Poland over the form of solution to the situation in which the Swiss franc debtors have found themselves. This article presents the following hypotheses: The credit policy of banks, which includes mortgage lending in Swiss francs, was a typical action in terms of risk management which in this case was two-way in nature. In addition, banks did not have the opportunity to significantly impose its policies on customers, as evidenced by the degree of market development and market competition. Conversion of mortgage loans according to the CHF historic exchange rate can affect the stability of the banking system. The article presents the main types and sources of bank risks with particular emphasis on credit risk and foreign exchange risk. In addition, the paper shows the importance of this kind of risk in the context of the systemic stability of the banking sector in a situation of exchange rate stability disturbances. Verification of the research hypothesis was based on literature studies and analysis of statistical data.
Authors and Affiliations
Grażyna A. Olszewska
Keywords
Related Articles
- EP ID EP489405
- DOI 10.24136/ceref.2018.017
- Views 60
- Downloads 0
The economic infrastructure as the factor of creating the microregions' economic potential
Theories of the regional development show that the economic infrastructure is a crucial factor of creating the regions and microregions competitiveness. The article presents results of empirical studies confirming relati...
Convergence tendencies in the EU Member States - a statistical study for the period 1980-2013
The aim of the article is empirical analysis of convergence process in the European Union especially after extending it by the groups of less developed countries ("cohesion" countries after their accession in the 1980s a...
Selected theoretical aspects of the international integration of underdeveloped countries
The key theoretical problem related to integration of less developed countries is the possibility of legitimate application of the existing theoretical framework of international economic integration to developed as well...
Integration of the Financial Market EU after the Financial Crisis
The EU integration and the creation of the so-called European single financial market requires creation of institutional solutions corresponding to the integrated structure. At the moment, we are dealing with globalisati...
What can Turkey learn from Argentina?
This paper compares the experiences of Turkey and Argentina in the face of the recent global economic meltdown. The historical and economic peculiarities of these two countries render them as perfect comparative case stu...