Tag Archive: capital buffer

Pros and Cons of the Swiss Countercyclical Capital Buffer

Switzerland is currently living in a big real estate boom. The bubble bursting would imply that banks' collateral in the form of real estate falls in value. Therefore the banks' assets might fall because many home buyers might not be able to repay their mortgage.  If a real estate bubble pops, then banks should be better capitalized to absorb such a shock. Therefore the Swiss National Bank introduced macro-prudential measures, like the so-called...

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Excessive Money Supply: Switzerland Could Follow in Spain’s and Ireland’s Footsteps

In the Euro zone bank lending is contracting, M3 is rising very slowly. As opposed to that, Swiss bank lending is currently rising by 4.4% per year, M3 is increasing by 10% per year.

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Swiss home price to income ratio small in historic and global comparison

Based on four different data source, we find out that Swiss home price to income ratio is small in global comparison. Therefore we wonder why the SNB must contain home price rises, but the Fed must artificially increase them.

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Swiss Public Discussion Switched from Floor to Housing Bubble

Why there is no real estate bubble in Switzerland yet and why the SNB will help to create one   With the current recovery in the United States the discussion in Switzerland switched from a discussion about the EUR/CHF floor to the Swiss real estate boom, the so-called “housing bubble”. It seems that the Swiss …

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SNB Monetary Policy Assessment December 2012: (Nearly) Full Text

  The SNB decided to maintain the floor at 1.20 and the Libor target between 0% and 0.25%. As we expected in our outlook on the assessment, there were still important downwards drivers of inflation after the strong appreciation of the franc. Therefore, the SNB has moved its inflation expectations downwards for 2013 to minus 0.1% …

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