ŠEMA PLJAČKE SA KREDITIMA U ŠVAJCARSKOM FRANKU OSMIŠLJENA JOŠ 80ih U AUSTRALIJI A POSLE SE SA MANJIM ILI VEĆIM USPEHOM PRIMENJIVALA NA NOVOM ZELANDU, ISLANDU, A DANAS U ZEMLJAMA ISTOČNE EVROPE.
Australia in the 1980s
In Australia banks started offering customers, many of them farmers, yen and CHF loans in the 1980s. With Australian interest rates at around 10-16% the 7% rates of the yen and the CHF was attractive. When the Australian dollar started depreciating in 1986 the difference in interest rates was by far not enough to compensate for the new ratio between the Aussie dollar and other currencies.
As always, the borrowers first tried to keep on paying, then to negotiate new terms with the banks followed by court cases, mostly based on the banks’ negligence of warning the borrowers of the inherent risk of FX loans. To begin with, the borrowers were fighting on their own, not realising that there were so many others in the same situation.
The banks had the upper hand in court: people should have understood the risk and it was neigh impossible for the borrowers to prove what the bankers had said or not said, promised or not several years earlier. The banks claimed the loans had been issued in good faith and foreseeing the Aussie dollar depreciation had been impossible.
Westpac had been particularly successful in the FX loan market. In 1991 a former Westpac executive, John McLennan, leaked two letters from 1986 showing that the bank was well aware of the risk. What ensued was an investigation, which exposed that not only had Westpac been aware of the risk but a law firm had helped it covering its track. This turned into a classic whistle-blower case: Westpac sued McLennan but later settled.
The letters set the story straight, politicians finally turned against the banks and thus the borrowers got the upper hand and some compensation. But all of this only happened five years after the depreciation, leaving many borrowers bankrupt with all the tragedies such events bring on.
The Australian saga entails the same elements later seen in country after country: banks lend in FX to people who neither have an FX income nor are particularly well-placed to gauge the risk; politicians side with the banks – and only after much struggle and long time are borrowers able to get a write-down or other assistance. But by then, tragedies such as divorce or homes lost have already happened and things can never be the same or compensated.
CEO TEKST http://fistfulofeuros.net/afoe/10640/
Australia in the 1980s
In Australia banks started offering customers, many of them farmers, yen and CHF loans in the 1980s. With Australian interest rates at around 10-16% the 7% rates of the yen and the CHF was attractive. When the Australian dollar started depreciating in 1986 the difference in interest rates was by far not enough to compensate for the new ratio between the Aussie dollar and other currencies.
As always, the borrowers first tried to keep on paying, then to negotiate new terms with the banks followed by court cases, mostly based on the banks’ negligence of warning the borrowers of the inherent risk of FX loans. To begin with, the borrowers were fighting on their own, not realising that there were so many others in the same situation.
The banks had the upper hand in court: people should have understood the risk and it was neigh impossible for the borrowers to prove what the bankers had said or not said, promised or not several years earlier. The banks claimed the loans had been issued in good faith and foreseeing the Aussie dollar depreciation had been impossible.
Westpac had been particularly successful in the FX loan market. In 1991 a former Westpac executive, John McLennan, leaked two letters from 1986 showing that the bank was well aware of the risk. What ensued was an investigation, which exposed that not only had Westpac been aware of the risk but a law firm had helped it covering its track. This turned into a classic whistle-blower case: Westpac sued McLennan but later settled.
The letters set the story straight, politicians finally turned against the banks and thus the borrowers got the upper hand and some compensation. But all of this only happened five years after the depreciation, leaving many borrowers bankrupt with all the tragedies such events bring on.
The Australian saga entails the same elements later seen in country after country: banks lend in FX to people who neither have an FX income nor are particularly well-placed to gauge the risk; politicians side with the banks – and only after much struggle and long time are borrowers able to get a write-down or other assistance. But by then, tragedies such as divorce or homes lost have already happened and things can never be the same or compensated.
CEO TEKST http://fistfulofeuros.net/afoe/10640/