Switzerland’s financial authority says the Ukraine war affects Swiss banks differently.
In assessing the impact of the conflict in Ukraine on the Swiss financial market, the country’s Financial Market Supervisory Authority (Finma) sees no widespread danger to the fundamental stability of the markets.
In a report released at its annual media conference, Finma said it is taking a very close look at the effects of the conflict on the Swiss banking center.
Risks
«This conflict entails a wide range of risks for the Swiss financial sector, which are accentuated at certain points for individual institutions,» according to Finma CEO Urban Angehrn. Still, Finma does not see any widespread danger to the stability of the Swiss financial market, the report said.
Real Estate Market
Rather than the war, the Swiss mortgage market appears to be causing more immediate concern at Finma.
Angehrn outlined risks to financial institutions taking more risk in the mortgage market warning against relaxing mortgage lending requirements.
«A correction of the real estate markets poses a concentration risk for our economy as a whole, and particularly for highly exposed institutions,» he said, adding that «as a supervisory authority overseeing the financial center, we are highly skeptical of such relaxations to the requirements for mortgage lending. They would further increase the already significant risks in the market.»
SNB
Finma isn't the first Swiss institution to warn about mortgage and real estate risks. The Swiss National Bank (SNB) has also been pointing these out as prices are being pushed higher in search of sustainable and stable returns.
Finma also laid out what had been accomplished in the past year, noting it conducted 650 investigations, up slightly from 628 in 2020. Enforcement actions fell to 20 from 33 in 2020, which included combating money laundering, corporate governance deficiencies, and risk management at the institutions falling under its supervision.
