WARSAW--Poland's finance minister ruled out providing debt relief to more than half a million borrowers by allowing Swiss franc loans to be converted into the local currency at lower exchange rates, saying such a move could undermine the financial sector's stability.

"It isn't the role of the government to be removing all possible risks people face, such as the risk of foreign-exchange fluctuations or changes to property values," Mateusz Szczurek said on Wednesday.

His comments, which boosted shares in Polish banks, contrast with those made by the Poland's financial regulator last week. The Financial Supervision Authority had suggested that borrowers struggling with higher debt and monthly payments might be permitted to convert their loans at the rate they received them, provided they pay banks the difference in payments over the years in comparison with zloty loans, which had a higher interest rate.

Comments from Prime Minister Ewa Kopacz earlier this week also had indicated the Polish government was ready to consider exposing banks to some losses on foreign-currency loans.

Poland's economy ministry, however, did propose some steps on Wednesday to ease the burden on borrowers with Swiss franc loans, including converting them to zlotys at the current exchange rate--which is much higher than before the Swiss National Bank abruptly scrapped its policy of curbing the value of the country's currency against the euro.

Mr. Szczurek said a conversion using historical exchange rates would undermine the stability of the banking sector in Poland.

"As to mechanisms that would enforce loan restructuring, they are dangerous for borrowers. If the zloty firms to the franc, which may and will likely happen, it would be detrimental for clients. All such decisions must not undermine the stability of the financial sector."

Polish bank stocks soared on the news. Poland's top bank by assets, state-controlled PKO Bank Polski SA was 5% higher in late afternoon local time, Commerzbank AG's mBank SA was 4.7% higher, while small lender Getin Noble Bank SA, with a relatively high portfolio of Swiss franc loans, was 9.3% higher.

The SNB's decision to no longer curb the franc's strength on Jan. 15 briefly sent the zloty to 5.19 against the Swiss currency, shocking borrowers in Poland as well as Austria, Hungary and Romania, where franc loans used to be popular because of lower interest rates compared with most currencies.

The zloty has recovered partially since, trading at 4.13 zlotys to the franc on Wednesday afternoon. While the exchange rate seems more manageable, it is well above levels of around 2 zlotys in 2006-2008 and may still cause pain to overleveraged borrowers, increasing nonperforming loans in Poland.

To help them, Polish banks will account for negative London interbank offered rates, which will mean lower monthly payments for borrowers, said Economy Minister Janusz Piechocinski.

Borrowers will also have the option of converting loans at the central bank's official current exchange rate without fees, as well as a three-year freeze on capital payments. The government will also ask banks not to seek additional collateral, or guarantees from borrowers when the value of the loan exceeds the value of the asset it financed.

Write to Patryk Wasilewski at patryk.wasilewski@wsj.com

Access Investor Kit for Schweizerische Nationalbank

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=CH0001319265

Subscribe to WSJ: http://online.wsj.com?mod=djnwires