Switzerland's financial regulator said on Tuesday mortgage lending standards had scarcely improved despite a sharp warning last year in the face of what experts and overseers describe as a growing bubble in the Swiss housing market.
"We cannot establish any significant changes in credit policies. We intervened intermittently, saw improvement where we did, but didn't see a broad-based improvement," FINMA head Patrick Raaflaub said at the regulator's annual news conference. He did not elaborate on how FINMA had intervened with lenders.
The Swiss Finance Ministry has backed down on planned stricter capital measures against mortgage risks, in favour of self-regulation by the industry.
FINMA and the Swiss National Bank last year urged big mortgage lenders such as Raiffeisen and cantonal banks to stiffen lending standards, which bankers say were increasingly relaxed amid heated competition for business in Switzerland.
The Swiss real estate market, red hot especially in desirable areas such as St. Moritz, Geneva's lakefront and commodities hub Zug, has led the national bank to repeatedly warn of a housing bubble.
But the SNB is also hamstrung by the need to keep interest rates ultra-low to avoid drawing more speculative international capital into the Swiss franc. The currency is already at record highs, which have in turn weakened Switzerland's competitiveness and growth outlook.
SOURCE Reuters
