Switzerland: Financial Sector Stability Assessment; imf country Report 14/143; April 16, 2014

26 
INTERNATIONAL MONETARY FUND
B. Macroprudential Policy Framework 
43. Macroprudential powers and responsibilities are split across agencies. The SNB has a 
financial stability mandate in the context of monetary policy, and FINMA has responsibility to 
protect the functioning of financial markets. There is a memorandum of understanding (MOU) 
between FINMA and the SNB. The federal government, with significant regulatory powers, also has 
an important role in regard to financial stability policies, and there is a MOU between the Federal 
Department of Finance (FDF), FINMA, and the SNB.  
44. Developments in real estate and mortgage lending are important macroprudential 
concerns. Very loose monetary policy has driven interest rates down to historically low levels, 
bringing total mortgage debt above 140 percent of GDP. In parallel, housing prices have been 
rising, particularly in certain segments of the market. Long standing tax policies to promote home 
ownership have likely amplified the real estate boom.  
45. The authorities have taken measures to address these risks. FINMA adopted new 
requirements for mortgage financing, drawn up by the Swiss Bankers Association (SBA), as 
minimum regulatory standards in effect since mid-2012 (including down payment and repayment 
time). The Federal Council backed these measures by requiring a risk-weight of 100 percent for 
non-compliant loans and, from the start of 2013, an increase in the risk weight for the part of 
mortgages exceeding 80 percent of the property value. In 2013, FINMA tightened rules for risk-
weighting mortgages for banks applying an internal ratings-based approach. Finally, a CCB was 
introduced, targeting residential property by requiring banks to hold 1 percent of their associated 
risk-weighted positions as extra capital by end-September 2013.
9
A further increase of 1 percent 
was announced in January 2014, effective June 2014.