Press release
Mortgage market

Mortgage market: FINMA approves Swiss Bankers Association’s revised self-regulation

The Board of Directors of the Swiss Financial Market Supervisory Authority FINMA has approved the revised guidelines of the Swiss Bankers Association "on examining, evaluating and settling mortgage-backed loans". FINMA points out, however, that alongside these qualitative provisions, new quantitative measures are also required to effectively counteract the growing risks for banks stemming from the increase in the number of loans being granted for residential properties. Moreover, these risks are further accentuated by the low-interest environment. 
The Swiss Bankers Association's revised guidelines specify the qualitative criteria for granting mortgage loans in important areas such as financial sustainability, loan-to-value ratio and handling exceptions to policy. FINMA regards the revision as a step in the right direction and as an improvement in self-regulation.

Further measures necessary

Against the backdrop of the steady increase in risks in the mortgage business accentuated by the low interest rates, FINMA deems further measures essential to guarantee high-risk loans for financing residential properties. For some time, FINMA has worked extensively on these risks: it has considerably intensified its supervisory activities in the mortgage financing sector since 2010 and has frequently sought to raise public awareness about the general situation. It is FINMA's view that, besides the qualitative parameters announced today by the Swiss Bankers Association, binding quantitative measures are also required. To this end, FINMA supports the Federal Council's decision announced on 17 August 2011 to tighten capital adequacy requirements in the mortgage business. It is the Federal Council's intention that from 2012 banks back their mortgage loans with additional capital resources and that the requirements for such loans go beyond the regular norms for loan-to-value ratio and financial sustainability. This will in turn contribute substantially to improving the risk situation of banks active in the mortgage business. In addition to these quantitative measures within the framework of the Capital Adequacy Ordinance, it is planned to establish an anticyclical capital buffer limited to the loan market at national level.


Tobias Lux, Media Spokesperson, phone +41 (0)31 327 91 71,