Loans Approved in Swiss Francs
22/08/2016
In relation to repeated false, unfounded and malicious attacks on the Central Bank due to its position concerning resolution of problematic loans in Swiss francs, especially the view that the Central Bank continues to obstruct the adoption of the law on this issue, the Central Bank would like to point out the following:
The Central Bank has, even before the Adoption of the Law on conversion of loans in Swiss francs (CHF) to euro (EUR) in July 2015, repeatedly indicated that the best solution to this problem would be to find a possibility for a mutual solution between banks and users of loans approved in Swiss francs, and that, in case of a failure to find a mutual solution to this problem, that such cases should be decided by a competent court. Namely, the CBCG believes that the adoption of a law that changes earlier contractual relation between banks and their clients would create legal uncertainties, thus questioning the rule of law principle. The Law on Contracts and Torts recognises a number of legal institutes (the principle of equal consideration (Article 8), substantial mistake (Article 54), circumstances relevant for interpretation (Article 97), alteration or rescission of contract due to changed circumstances (Articles 128-131), impossibility of performance (Article 132-133), etc.), which implementation would resolve the problem of loans approved in Swiss francs either by mutual agreement or before a competent court, with a possibility of a justified approach of individual resolution of every loan approved. This is the only thing that would completely ensure that the resolution of problems arising during the fulfillment of each individual loan agreement considers all relevant conditions of the loan, as well as all subsequent circumstances arising in the period of fulfillment of the loan agreement. For these reasons, several years ago, loan beneficiaries themselves initiated appropriate legal proceedings before competent courts. Solving the problem in this manner would avoid the risk of insufficient legal security for investors, which occurs in a situation when the state interferes in concluded contractual relations. Also, this enables to avoid the risk of retroactive implementation of certain norms when adopting the law, thus also avoiding the risk of assessment of the constitutionality of such decision from the aspect of existence of the previously established public interest.
In this respect, the Central Bank believes that it is important to point out certain views of the European Central Bank, given in their view on the conversion of loans in Swiss francs, adopted on 18 September 2015 (following the aforementioned position of the Central Bank):
conversion of loans in Swiss francs can have negative consequences if it would harm the interest of foreign investors due to the noticeable increase of legal uncertainty and country risk;
The authorities of certain countries should assess whether this way retroactively interferes with the relationship of certain contractual parties and whether it is in accordance with the constitution and laws of a particular country. However, the ECB notes that the introduction of measures with retroactive effect reduces legal certainty, which is not in accordance with the principle of legitimate expectations.
The Central Bank held the above positions solely in order to avoid possible risks and adverse effects of the adoption of the law governing the conditions for the conversion of loans granted in Swiss francs, which it believes was its constitutional and legal obligation.
Therefore, the allegations that the Central Bank unfoundedly obstructed the adoption of the law governing the conditions for conversion of loans granted in CHF, as well as accusations given in public about illegal or corruptive influence on the Central Bank are so frivolous that the Central Bank will not even comment them.
However, during the process of adoption of the applicable Law on the conversion of loans in Swiss francs CHF into euro EUR and now that the amendments to this law are proposed, while respecting the will of the legislator to address this problem under the law, the Central Bank demonstrated its professionalism by giving their expert opinions for improving the text of the proposed legislation, even in the form of amendments that could be submitted by the authorized proponent.
While continuing to demonstrate its professional attitude, and in accordance with the agreement between the Minister of Finance and the Governor of the Central Bank, representatives of the Central Bank participated in a meeting with representatives of the Ministry of Finance and representatives of the beneficiaries of loans granted in Swiss francs, in which they discussed the Draft law amending the Law on the conversion of loans in Swiss francs CHF into euro EUR, as of 01 August 2016.
During the meeting, participants discussed the particular issues and agreed to take actions towards appropriate correction of solutions from the Draft law during further procedure of its adoption.