IDEAS home Printed from https://ideas.repec.org/p/imf/imfscr/2025-298.html

Switzerland: Financial Sector Assessment Program-Technical Note on Macroprudential Policy and Real Estate Risks

Author

Listed:
  • International Monetary Fund

Abstract

This Technical Note examines the evolution and impact of Swiss macroprudential policy tools targeting real estate markets. The paper reviews the institutional aspects of the macroprudential framework. The note also looks at the real estate market dynamics since the 2019 Financial Sector Assessment Program (FSAP) and highlight key financial stability risks. Rising systemic risks from the real estate market call for new measures to be implemented promptly. The FSAP recommends the introduction of a debt-service-to-income (DSTI) cap in addition to the existing loan to value (LTV) caps. While the LTV caps set out in the self-regulation seem to have been effective, the share of loans not meeting FINMA’s affordability benchmarks is high and has risen in recent years. The FSAP’s analysis shows that in around 50 percent of owner-occupied mortgage lending and around 60 percent of investment-property related lending since 2017, stressed debt service and maintenance costs exceed the income-based affordability threshold. A counterfactual analysis suggests that introducing a DSTI cap would be a well-suited measure to address the riskiest types of mortgage lending to households.

Suggested Citation

  • International Monetary Fund, 2025. "Switzerland: Financial Sector Assessment Program-Technical Note on Macroprudential Policy and Real Estate Risks," IMF Staff Country Reports 2025/298, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2025/298
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=571809
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfscr:2025/298. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.