After the Swiss National Bank abandoned its currency controls against the euro last week, the currency's value boomed.
That's great news for Swiss consumers who want to buy things from Europe, but bad news for Swiss manufacturers that want to sell things there. Polish mortgage-holders are also feeling the pain.
That's because half of Poland's mortgages are denominated in foreign currencies, and 80% of those foreign currency mortgages are denominated in Swiss Francs:
Morgan Stanley
The government is ordering an investigation into the practises of the country's banks, after the Swiss Franc's boom last week made paying back a mortgage dramatically more expensive for hundreds of thousands of Poles.
This might seem odd from the outside, but getting hold of low-interest loans was easier for Poles borrowing in Swiss francs during the years in the run-up to the financial crisis. From early 2004 to 2008, the Polish zloty was appreciating against the Swiss Franc, too. So mortgages denominated in francs were effectively falling as Polish incomes (in zloty) became more valuable.
That all turned around pretty quickly as the financial crisis hit, and got particularly bad in 2011. As a safe-haven currency, the franc climbed in value rapidly, and people with franc-denominated loans effectively saw their mortgages grow. It was particularly bad in 2011, just before the Swiss National Bank pegged its currency against the euro.
The Swiss National Bank's rate cut (it slashed Switzerland's main policy rate to -0.75%) should help to protect Polish borrowers with Swiss franc mortgages in terms of their monthly payments, but the total size of the mortgages just swelled considerably.