Banks face bankruptcy over franking agreements
The KNF warns of an unfavorable TSUE ruling. It would result in the bankruptcy of even several large banks.
The Court of Justice of the European Union (TSUE) is expected to decide on the possibility of banks seeking remuneration for the use of capital after the invalidation of franking agreements. Jacek Jastrzebski, chairman of the Financial Supervision Commission (KNF), warns that the inability to collect remuneration in such a situation could end tragically for the banks. If the TSUE issues an unfavorable judgment for them, the consumer will get a free loan. The bank, on the other hand, will be left with the cost of the capital the customer has had for many years. In total, such a verdict would cost the sector PLN 100 billion. It would involve the risk of bankruptcy for one or even several large banks. Smaller institutions, including those without foreign currency loan portfolios, would also face problems.
The KNF’s data shows that the number of franking credit agreements that are subject to disputes is about 100,000. Most of the disputes are won by franking creditors. They mainly seek the cancellation of contracts.
