What are the difference among the currencies of foreign exchange loans?

Bank solvency is affected by currency fluctuations if foreign currency loans (FCL) are significant. Current paper analyzed the extremity of these fluctuations and the time-variance of the currency correlations in the case of the Hungarian Forint and Czech Koruna (as a control variable) against the main FCL currencies like Euro, Swiss Franc and Japanese Jen. Test were conducted on four event windows, involving a pre-crisis and three crisis intervals – defined by the exchange rate related central bank operations. Our results suggested the declining occurrence of extreme currency fluctuations due to the continuously enhanced “temporary” swap agreements in the past half-decade, however, the historical strong correlation declined through this process. The institutional message of this paper is to support the idea of joint central bank actions in crisis management, which supposes some prudential abilities and tools of the central banks.