ZURICH Jan 23 The Swiss government is raising
the level of capital banks must hold against their mortgage
activity, tightening controls on lenders after the previous
requirement failed to dampen Switzerland's housing market boom.
Real estate prices and mortgage lending have risen strongly
in Switzerland in recent years, a by-product of the ultra-low
interest rates set by the central bank to lessen the appeal of
the safe-haven Swiss franc and prevent a recession.
Swiss banks will have to hold 2 percent extra capital
against mortgage risk-weighted assets from June 30, 2014, up
from the 1 percent they were required to hold by the end of
September last year.
The government action comes as the result of a request from
the Swiss National Bank, which has repeatedly expressed concern
about overheating house prices.
(Reporting by Caroline Copley)