Banka Slovenije opinion of the draft law regulating the issue of Swiss franc loans
On 19 January 2022 the National Assembly’s finance committee discussed the draft law on the mitigation and allocation of currency risk between lenders and borrowers in Swiss francs (hereinafter: the draft law). It regulates relations between lenders, borrowers and guarantor who between 28 June 2004 and 31 December 2010 entered into loan agreements denominated in Swiss francs or with a Swiss franc clause.
The finance committee approved the draft law and, despite opposition from the Slovenian government and the European Central Bank, allowed it to continue its legislative path at the regular session of the National Assembly beginning on 31 January 2022.
Banka Slovenije understands well that the consumer of financial services is the weaker party in contractual relationships with banks as lenders. Many of our tasks defined by law and numerous other activities that we undertake are aimed at protecting consumers, such as the financial literacy initiative.
But we have a number of key reservations in connection with the draft law:
- The draft law resolves the issue in a way that is not compliant with European and Slovenian law. In accordance with Articles 4(1)(a) and 14(5) of Council Regulation (EU) 1024/2013, the withdrawal of authorisations from credit institutions, i.e. banks and savings banks, is exclusively a competence of the European Central Bank, and not Banka Slovenije as stated in the draft law. Furthermore, one of the general principles of Slovenian law and EU law is the principle of legal certainty, and the consequent prohibition of retroactivity in general legal acts.
- The adoption of the law might also have an adverse impact on the stability of the Slovenian financial system or banks with highest exposure, and could reduce confidence in the security of investments in Slovenia.
Here Banka Slovenije should again highlight the ECB’s most recent opinion of 26 November 2021, which it issued in response to the draft law on the basis of its powers under the Treaty on the Functioning of the European Union. Like Banka Slovenije, the ECB highlights the risks entailed by the draft law. Banka Slovenije is fully supportive of the ECB opinion.