Poland’s growing derivatives market is learning the bitter taste that comes when the products are misused. A public backlash against derivatives as dangerously risky instruments is in full swing, after scores of companies suffered heavy losses on ill-judged currency hedges.
The public debate is thick with sensational language about “Satanic contracts”. The president of the Polish Business Roundtable, Zbigniew Jakubas, fulminated: “It is a product from hell,” and then discovered a manager in his own railway engineering company had staked €160m on a currency hedge, losing over Z100m.
Economy minister Waldemar Pawlak called on Tuesday February 10 for legislation to cancel damaging derivatives deals – a move that some fear could undermine confidence in Polish commercial contracts and further weaken the derivative market.
Krzysztof Pietraszkiewicz, head of the Polish Banking Association, hit back, saying “This is not the proper way of resolving disputes...