(Adds detail on focus of new measures)
ZURICH Feb 7 The Swiss National Bank is ready
to explore alternative methods to cool Switzerland's overheating
property market if current macroprudential measures don't do the
job, with a particular focus on the buy-to-let sector.
Real estate prices and mortgage lending have risen strongly
in Switzerland in recent years, a by-product of ultra-low
interest rates set by the Swiss central bank to lower the appeal
of the safe-haven franc.
The Swiss government, at the request of the central bank, is
already forcing Swiss banks to maintain extra capital against
the mortgages they hold. Now the SNB is discussing other options
with Swiss financial regulator FINMA.
"We believe the time now is right to explore the possibility
of alternative measures," Jean-Pierre Danthine told an audience
at the Finanz und Wirtschaft forum in Zurich on Thursday
Danthine said the new measures should focus in particular on
aspects of property-market supply and borrower burden. He did
A spokesman for the SNB said on Friday this referred to real
estate built or bought for the purpose of renting out to
"The mortgage growth in that segment was particularly strong
recently," the spokesman said.
The Swiss government said last month it was raising the
level of capital that banks must hold against their mortgage
book to 2 percent from 1 percent, after an effort to curb a
housing boom failed to restrain the sector enough.
Swiss law allows for this so-called counter-cyclical capital
buffer to be increased to up to 2.5 percent.
The bulk of Swiss home mortgages are held by the country's
smaller banks, rather than the dominant UBS and Credit
Suisse, which are already subject to strict capital
rules imposed after the financial crisis.
The SNB cannot easily raise rates; that would clash with its
efforts to cap the Swiss franc. The central bank began holding
down the franc in 2011 after investors fleeing the euro zone
crisis bid the currency up to record levels.
(Reporting by Alice Baghdjian; Editing by Toby Chopra)