Switzerland: Technical Note-Macroprudential Institutional Arrangements and Policies

International Monetary Fund

No 2014/269, IMF Staff Country Reports from International Monetary Fund

Abstract: This Technical Note on Macroprudential Institutional Arrangements and Policies on Switzerland highlights that macroprudential prudential powers and responsibilities are split across agencies. There is one dedicated macroprudential tool, the Counter Cyclical Buffer, which has a specified framework for decision making and consultation. Developments in real estate and mortgage lending are important systemic concerns. Very loose monetary policy has driven interest rates down to historically low levels, accelerating mortgage lending and bringing total mortgage debt to more than 140 percent of gross domestic product. The authorities have taken measures to address these risks. It is recommended that transparency and accountability could be strengthened by highlighting cross agency activity and policy analysis related to financial stability and macroprudential policies to the public. In a medium-term perspective macroprudential arrangements should be reviewed while considering placing responsibility and powers for macroprudential policies with one institution or committee. Additional measures may be needed. Mortgages to businesses and for commercial purposes deserve further attention and measures.

Keywords: ISCR; CR; financial market; mortgage lending; risk appetite; real estate; banking sector; FINMA share; lending standard; SNB estimate; department II; requiring bank; cantonal bank; lending portfolio; interest margin; renewed mortgage; Mortgages; Real estate prices; Financial sector stability; Macroprudential policy; Housing prices; Global (search for similar items in EconPapers)
Pages: 38
Date: 2014-09-03
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