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31/08/2016

In relation to a number of false, unfounded and biased attacks on the Central Bank due to its professional position concerning resolution of problematic loans in Swiss francs, stated during the meeting of the Fourth Extraordinary Session of the Parliament of Montenegro from 30 August 2016, a meeting of the Council was held:
     
Aimed at protecting the reputation of the Central Bank of Montenegro as an independent institution, the Council of the Central Bank indicates that the abovementioned attacks are deliberately misleading the public, with ulterior motives. Arbitrary and unfounded accusations that the Central Bank and its management are involved in corruptive practices and thus cooperated with "Hypo Alpe Adria Bank" are absolutely untrue and we reject them with indignation.

Contrary to the aforementioned allegations, and in accordance with its constitutional and legal role, the Central Bank has continuously, since the onset of problems with loans granted in CHF, provided its expert views in a constructive and professional manner and indicated the possible applicable and equitable solutions. By giving its full contribution to the advancement of the proposed solutions, the CBCG demonstrated its professionalism and responsibility during the process of adoption of the Law on conversion of loans in Swiss francs (CHF) into euros (EUR) in July 2015, as well as in the process of considering the Draft law amending the Law on conversion of loans in Swiss francs (CHF) into euros (EUR) whose adoption procedure is ongoing.

With the view to objectively informing the public, and having in mind the importance of the issue discussed in the Parliament, the Central Bank reiterated the facts that deny the false allegations, namely:

• False argument that the Central Bank promoted loans in Swiss francs. On the contrary, since 4 December 2006, the Central Bank informed the borrowers that a loan agreement in Swiss francs bears a currency risk, due to possible changes in the exchange rate of the Swiss franc;

• False claim that there is no methodology for calculating interest, given that there is a universally accepted methodology (compound interest account and decursive calculation method), which is based on the rules of financial mathematics and included in the "Decision on the manner of calculation and reporting of effective interest rate". The problem is that by using this methodology in the solutions proposed in the Draft law amending the Law on conversion of loans in Swiss francs (CHF) into euros (EUR), certain categories of borrowers would be unequally treated. For example, by implementing the calculation method from the Draft law, for two loans amounting to 100,000 euros, each, which have been approved at the same day and having the same repayment period as well as an interest rate, the difference between the remaining debt of the beneficiary whose loan was not assigned to a third party and the beneficiary whose loan was assigned to that party could amount to as much as 20,000 euros. This method favors beneficiaries who failed to regularly meet their obligations and whose receivables in respect of those loans were assigned to a third party;

• The claim that created the public perception that the loans in Swiss francs were taken exclusively to address the housing needs of citizens is completely false, as best illustrated by the fact that out of 129 assigned loans 15 largest loans that are given for business purposes, accounted for more than 75% the value of all assigned loans, which is more than 50 million euros. To be more precise, the average value of these 15 loans is about 3.33 million euros;

• The claim that loans in Swiss francs were granted exclusively by the “Hypo Alpe Adria bank” is false because these loans were granted by several banks in a large number of countries – Austria, Germany, the Netherlands, Italy, France, Hungary, Poland, Slovakia, Czech Republic, Luxembourg, Greece, Italy, Slovenia, Croatia, Serbia, Bosnia and Herzegovina and other. Also, compared to other countries, Montenegro had the smallest share of these loans (Montenegro 762 loans, Serbia about 23,000 loans, in Croatia over 60,000, in Poland close to 700,000, in Slovenia around 10,000 in Bosnia and Herzegovina over 5,000 loans, etc.);

• The claim that the loans in Swiss francs represent absolutely void legal matters is false because this claim is contrary to the current legislative framework regulating this area;

• There is also a false claim that "Hypo Alpe Adria Bank" assigned their claims to the company "Hypo-Alpa-Adria Development" doo Podgorica (now "Heta Asset Resolution" doo Podgorica) without compensation based on part of loans granted in Swiss francs, because "Hypo Alpe Adria Bank" collected 54,103,000 euros for the amount of assigned receivables amounting to 66,698,000 euros, of which there is adequate documentation.

This is only a response to some of the numerous unfounded and untrue accusations that were said at yesterday's session of the Parliament of Montenegro, which convincingly indicate the intent of those who created them.