For years, warns the Swiss national Bank (SNB), the International monetary Fund (IMF) and the Swiss financial Supervisory Finma in front of the rising risks in the mortgage market. Here the so-called yield the last property the focus, so houses and flats built as a capital investment. However, the volume of credit continues to grow unabated.
Now, the Finma, the patience is ripped thread: Either the banks to present proposals for self-regulation, in order to get the risks. Or the own funds, tightened requirements for banks and the costs. “This year, it must be clear which way we go,” said Finma Director Mark Branson at the annual media conference.
Hypomarkt “Too-big-to-fail”
Branson was not sparing with superlatives: “You can call the mortgage market as “too big to fail”.” In clear text: The gigantic mortgage book of banks take a risk for the economy as a whole. The real estate loans have reached a volume of about 1000 billion Swiss francs, in ten years, they have grown to 45 percent. Especially in the case of the investment properties, the growth was unbroken.
The SBA has see the rebuke coming, and already the end of March, is open for self-regulation are shown. Are planned for shorter periods for the amortization or tougher own funds rules for borrowers. At the end of March, the Association had but still open as to whether new rules are really necessary.
Now the banks a draw: “We came to the conclusion that the momentum is problematic,” said a spokeswoman for the bankers Association. Details for stricter lending rules for investment properties, the Association announced for the second quarter.
Alarming stress test
The results of last stress tests of the Finma are disturbing: It was simulated in the toughest scenario, a real estate crisis, Switzerland had experienced in the 90s already. Result: About half of the 18 tested institutions have suffered in the Test losses large enough that they “fall well below the threshold of the applicable capital requirements and would need to recapitalise,” said Branson. Broke would be decreased to no Bank, you would need fresh money to boost the balance sheet to find. 70 percent of the calculated losses to be covered in the case of investment properties. In this case, this accounted for only 29 percent of mortgage volume. to get
these rising risks in the handle, keeps Branson’s self-regulation would be more effective, because this would help to limit the demand for credit. As an example, he cited stricter loan-to-value limits, that is to say, that an Investor needs to raise more equity to get a mortgage . The amortization periods were screw a suitable Parking.
Ball is located at the banks
in Order to keep the pressure high, the Department of Finance (FDF) in parallel to a tightening of capital regulation for banks, especially for investment properties, was confirmed by a spokesman. “The Ball now lies with the financial institutions,” said the spokesman.
However, regardless of a stricter self-regulation, or increased capital requirements – both versions will not go to the core of the problem: the ultra-low interest rates. And who is in charge of the Swiss national Bank (SNB). This may or may not want to increase it, as long as the European firms, the Central Bank monetary policy. And this can take time.
Finma does not contradict the IMF
The International monetary Fund the mortgage the risks of the Swiss banks are a thorn in the eye. He had criticized earlier in the week, the Finma itself: you will not be tested enough banks, but draw back to heavily on audit firms. However, this would be a conflict of interest, since the auditor will also examine the banks ‘ balance sheets.
To Finma, President of Thomas builders rebounded this review: This dual System there since 1934, the Finma, found “an intelligent way”, with precise orders, the used business use the controller in a targeted manner and to avoid conflicts of interest.
Finma-Director of the Branson sounded a little more nuanced: The supervision intends to use the auditors in a more targeted and only banks with increased risks under the microscope. “This is more efficient and cheaper, and a portion of the savings we intend to invest the cost in reinforced, on-site inspections,” he announced. A massive increase in the Finma he urged.
Which would politically push on resistance: “The IMF has pretty much demanded a lot of Nonsensical, so too is an Expansion of Finma”, says SVP-national Council Sebastian Frehner. In recent years, Finma has been expanded greatly, “not only to the Good”. (Editorial Tamedia)
Created: 04.04.2019, at 18:56
