Après avoir massivement prêté aux pays d'Europe de l'Est, la Suisse est-elle menacée par le syndrome Islandais ?
Tiré d'une interview dans le "Tagesanzeiger " daté du 17 février 2009
Switzerland threatened with bankruptcy
Swiss banks have given billions of credit to Eastern Europe - now the
customers cannot pay back the money. Switzerland is threatened with the fate of Iceland, says economist Arthur P. Schmidt.
In countries such as Poland, Hungary and Croatia, the Swiss franc has become an important currency. Thousands of households and small firms took out loans in Swiss francs, and not in the national currency zloty, forint, or kuna because of lower interest rates. In Hungary, 31 percent of all loans are in Swiss currency. Amongst household loans, they are almost 60 percent.
Borrowers in distress
Now, the financial crisis has ended the era of cheap credit. As a result, Eastern European currencies are falling. At the end of September, one had to pay 46 francs for 100 Polish zlotys. Today it is 30 francs. That means more and more borrowers are having problems with interest payments and repayment. So the question is what
effect this has on the Swiss financial marketplace. One who sees a dark future
for Switzerland is economic expert Artur P. Schmidt. He believes that the Swiss
franc is in danger because of the loans in Eastern Europe.
In Poland, Hungary and Croatia, the Swiss franc has become an important foreign currency - the dollar, so to speak, of Eastern Europe. Thousands of households and businesses have franc loans. Why?
The rapid growth in many countries of Eastern Europe
was stimulated through loans in Swiss francs. Swiss banks and offshore
institutions loaned the local banks francs, which passed the francs onto their
customers. The loans were attractive because borrowers pay interest rates much
lower than required for loans in local currency.
Now, this system has been shaken?
Yes, the system has only worked as long as the exchange rate between
the franc and the currencies were reasonably stable. But that is not currently
the case. For example, the Hungarian forint and Polish zloty have lost over a
third of their value against the Swiss franc in recent weeks. Because of the
devaluations of the national currencies, the debt to Switzerland has increased
by more than one-third. Many of the Eastern European countries have serious
payment difficulties, and are virtually bankrupt.
What does this mean for Switzerland?
It is likely that a significant proportion of the total 200 billion U.S. dollars of Eastern European loans were issued in Swiss francs.
According to a report by the Bank for International Settlements worldwide franc
loans equivalent to around 675 billion U.S. dollars are in circulation - which
was about 150 billion directly from Switzerland, 80 billion of Great Britain and
about 430 billion U.S. dollars through offshore financial centres. How many of
these loans have gone bad is not known. But even if the failure rate is 20
percent, the banks would lose a lot of money.
Is the federal government going to intervene now?
If the banks require a massive writedown of such loans,
above a certain magnitude, the government must intervene. This is already
happening via the Swiss National Bank. In Poland, it has made several billion
francs available to the local central bank so that Polish banks can cover the
loans. At the same time, the Swiss National Bank inquired by the European
Central Bank whether it could borrow money in an emergency. This is a clear
warning sign that the Swiss franc could be under huge devaluation pressures in
the near future.
Swiss banks were too careless in their lending in Eastern Europe?
Yes, indeed. Many bankers wanted to earn a lot and neglected the
risks. The National Bank is also at fault as it did not intervene. In addition,
the regulator and the politicians completely failed.
What Switzerland must do now?
Now, the possible losses caused by these loans must be made transparent.
Above all, all of the Eastern European risks must be fully disclosed. Together
with the loan losses from UBS and Credit Suisse, the entire writedown for
Switzerland could exceed the Swiss gross domestic product.
That is to say?
Switzerland, like Iceland, is threatened with a potential national
bankruptcy. One consequence would be that the Swiss currency could fall
massively in value — possibly even crash. Another would be that Switzerland’s
credit rating would be massively downgraded. That would be a trauma for the
country: Switzerland was always as a stronghold of stability. The franc could
become an unstable soft currency. Then Switzerland would perhaps be forced to
abandon the franc and take on the euro.
Source : Credit Writedown