The judge told bank representatives that it was necessary to explain the legal and commercial reason that could justify pegging loans to a foreign currency.

"You need to consult with your management to see if they can justify this, then we can continue", Judge Dobronic told counsellors for the Zagrebacka, Privredna, Erste, Raiffeisenbank, Hypo Alpe-Adria-Bank, OTP, Splitska Banka and Sberbanka banks.

He called on counsellors for both the banks and petitioners to consider a settlement.

The court determined that oscillations in the currency exchange rate of the Swiss franc amounted to 45% whereas the ratio between the euro to the kuna oscillated plus/minus 5%.

Monetary policy and financial expert Ivan Lovrinovic, who acting as an adviser to the petitioner, said that the kuna was a stable currency and that bank analysts could have foreseen tendencies in currency exchange rates considering trends on capital financial markets, inflation and interest rates.

He added that in September 2008 analysts could have seen that serious disruption to relations between the euro, dollar and the franc had occurred.

Representatives of all eight banks argued that the growth in value of the Swiss franc was unpredictable and that in October 2008 they had offered clients to covert loans pegged to the Swiss franc to euro.

The trial will continue on March 8 and banks have asked that the public be excluded.

In case it is determined that banks unfairly concluded loans pegged to the Swiss franc and with a variable interest rate, these loans will have to be converted to the kuna at the exchange rate valid at the time of taking the loan, and clients would be able to request a refund, a representative for the petitioner said however, this would not apply pursuant to a collective suit.