Currency Clauses in CHF Credit Agreements : A ‘Small Wheel’ in the Swiss Loans’ Mechanism

The so-called Swiss loans, i.e. consumer credit agreements expressed in Swiss Francs, can be compared to another famous Swiss product. Also the famous Swiss clocks and watches are characterized by a complex mechanism with many important parts guaranteeing an effective and proper functioning of the whole. However, different to Swiss clocks the Swiss loans have not run smoothly in EU Member States such as e.g. Hungary, Croatia, Poland, Romania and Slovenia. The national courts of these Member States have been struggling with a variety of issues arising under the Swiss loan agreements. The CJEU is almost regularly faced with requests for preliminary rulings in cases dealing with complex aspects of consumer crediting, unfair commercial practices and unfair contractual terms related to Swiss loans. With this in mind, this paper analyses key consumer protection issues related to consumer credit agreements expressed in Swiss Francs. It also addresses an important question arising from the above comparison: is the ‘currency clause’ expressing the loan in Swiss Francs, a ‘small wheel’ without which the contract mechanism cannot function?