According to Polish daily Parkiet, Banking Supervision Commission is likely to discuss possible implementation of quantitative restrictions on FX denominated mortgage loans, today, but the decision may be postponed by another month.
Our view: The 4 initial solutions on imposing new quantitative limits on FX-denominated mortgages are following: I) to introduce the resolution that would limit FX-lending in proportion to the equity (the solution that has been introduced in Romania); II) to introduce a 70% cap on LTV while lending in FX; III) connected with Basel II regulations (that will be binding from the beginning of 2008); IV) not to introduce any of the quantitative limits. According to initial data, those new restrictions should not have a significant impact on the capital requirements of the banks. We expect the news to have a neutral trading impact.