| ZURICH, July 2
ZURICH, July 2 Switzerland has opted not to
impose new measures on lenders to cool demand in the overheated
domestic housing market, saying curbs proposed by banks
themselves are sufficient for now.
Swiss lenders and financial regulators have been at odds on
how best to guard against the risk posed by historic highs in
house prices and mortgage debt, driven in part by ultra-low
The Swiss central bank has pared rates to lessen the appeal
of the safe-haven Swiss franc and stave off a recession.
The government on Wednesday welcomed stiffer standards for
mortgage loans proposed by the banking industry last week,
saying those measures could help rein in the risks linked to
rising house prices.
"For the time being, the Federal Council (Swiss government)
... does not envisage taking further measures," the government
said in a statement.
The move represents a win for Switzerland's banking
association, which has avoided further government measures after
twice being ordered to hold extra capital against risk-weighted
assets in mortgage portfolios.
The lobby last week promised banks will cut the required
time by which one-third of any mortgage must be repaid to 15
years from 20. Banks will also apply a more conservative measure
of price when financing property loans.
Swiss cooperative bank Raiffeisen, cantonal banks such as
Zuercher Kantonalbank and Banque Cantonale de Geneve
, and other regional lenders provide the bulk of Swiss
FINMA, Switzerland's financial regulator, described the
measures which are due to come into force on Sept. 1 as a step
in the right direction.
The government said it would decide by year-end whether more
demand-side measures are necessary and echoed comments from the
Swiss National Bank last month on higher capital requirements
for lending banks.
A spokeswoman for the Swiss Bankers Association said the
lobby group welcomed the support of the new rules.
Last week, Britain became the biggest economy to date to
impose mortgage lending curbs, when the Bank of England imposed
its first limits on how much most people can borrow to buy a
(Editing by David Holmes)