Analysis of the SNB big banks good for pandemic consequences gerüstetDie national Bank banks sees the storm more or less unscathed. A scenario analysis indicates that the resilience of banks will be sufficient. 0 comment due to a sound capital base in a favorable Position: the headquarters of The UBS (link) and CS (right) at the Paradeplatz in Zurich. (Archive image) Keystone/ Gaetan Bally
The Corona-crisis and the significantly gloomier economic Outlook, the Swiss banks were confronted with major challenges. On the domestic market-focused institutions are likely to survive, according to the Swiss national Bank (SNB), however, even this storm, the majority.
The Capital of the domestic banks are a crucial Element for the resilience of the banks, stressed the SNB on Thursday published “financial stability report, 2019”. Because the equity cushion is not certain just how many credits could be awarded a Bank. You have to help the banks to absorb possible losses, should be the impact of the pandemic even worse than expected.
A scenario analysis will give indications that the resilience of the domestic banks is “reasonable,” explained the guardian of the currency. Nevertheless, the extent of the impact of the Corona-crisis on domestic banks is still very uncertain. In spite of a re-increasing pressure on margins, banks are expected to remain profitable overall, believes the SNB. However, a “certain number” of banks will slip into the loss zone.
Also, UBS and CS is also good,
situated In the financial stability report, the SNB also provides the two large Swiss banks, UBS and Credit Suisse good marks. These are placed in the current environment, which was due in particular to the build-up of capital buffers in recent years in the context of the “Too-big-to-fail”regulation.
However, the “simultaneous deterioration of the economic situation in all regions of the world, together with the unusually high degree of uncertainty, considerable challenges for the two global Swiss banks,” the SNB. Due to their solid capital base, the two institutions were in a favorable Position to meet these challenges.
Although both would be recognized in the first quarter of 2020 continues its strong gains have left the Corona pandemic in the results, but their tracks, writes the SNB will continue to. In addition, be increased in the case of both institutions the risk-weighted assets (RWA), which have led to a reduction in their capital ratios.
the economic consequences of The pandemic and the impact on the two banks, meanwhile, remain the SNB is highly uncertain. The longer and deeper the downturn is, the more negative the impact on the quality of the credit portfolio of the banks. An even deeper recession than currently anticipated, combined with renewed turbulence in financial markets, would weigh on the banks any further, anyway.
the two globally active Swiss banks in the current environment are well positioned and you could support the real economy, was due to the reduction of risk and, in particular, the build-up of capital buffers in recent years in the context of the “Too-big-to-fail”regulation, the SNB.
is the risk real estate market
A special spotlight throws the SNB in its annual financial stability report once more on the real estate market. The imbalances in the Swiss mortgage market continued to present a risk, the guardian of the currency. And a longer and deeper recession than in the base scenario, which could trigger a price correction in the residential real estate market. Furthermore, rising unemployment is likely to increase the affordability risks for home buyers in addition.
The SNB had removed the part of the Corona-crisis, around three months, the so-called countercyclical capital buffer, so that the local banks will have more liquidity and the local economy with loans to can provide. The Instrument was introduced about eight years ago, and should mitigate the risks of a real estate bubble.
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