Poland's outgoing c.bank chief: convert FX mortgage loans at market rate......

May 23 Poland's outgoing central bank chief Marek Belka said on Monday that any conversion of the Swiss-franc denominated mortgages weighing on Polish banks should be done at the zloty's current market rate.

Poland's eurosceptic Law and Justice party (PiS) won power last year partly because it promised to help thousands of Poles who took out loans in Swiss francs when the franc was cheaper against the zloty. Those borrowers had seen the cost of their loans surge as the value of the franc skyrocketed.

Polish PiS-backed President Andrzej Duda proposed in January to convert the loans to zlotys at historical exchange rates and make banks make up the difference against today's stronger Swiss franc.

Poland's financial regulator KNF has criticised that idea, saying it would lead to exorbitant costs and possible bank failures.

"I think that there should not be a conversion at any other rate than the market one," Belka, an influential voice in Polish finance who leaves his post next month, told TVN24 news channel.

Sources told Reuters earlier this month that Poland is considering giving up plans to force banks to convert the mortgages to zlotys, in favour of laws allowing borrowers to recoup some of the loans' costs.

Duda's aides are to announce a new plan this month.

The powerful head of PiS, Jaroslaw Kaczynski, has said the central bank must get involved in dealing with the mortgages, according to the pro-government wSieci weekly.

Poland's central bank governor-designate Adam Glapinski, also a PiS ally, said last week that solving the mortgage problem is ultimately a political decision