ZURICH (Reuters) - Switzerland’s government on Wednesday rejected a finance ministry proposal to increase capital requirements for mortgages on residential investment property, saying it favoured self-regulatory measures introduced by the banking industry.
“The Federal Council has decided not to implement the proposed increase in capital requirements for mortgages on residential investment property,” it said in a statement. “This is because it considers the Swiss Bankers Association’s proposed self-regulation regime to be effective and appropriate.”
It adopted proposed changes to its Capital Adequacy Ordinance that it said would simplify capital requirements for certain small banks and securities firms, and would also ensure systematically important banks were well-capitalised at group-level in the event of a crisis.
Reporting by Brenna Hughes Neghaiwi; editing by Thomas Seythal