Risk Report The risks for Swiss financial centre

today, for the first time published in the risk report of the financial market Supervisory authority Finma presents the short-term risks for the financial sector. The Monitor was previously an internal tool for their work. Now it wants to publish the authority on a yearly basis. So you want to ensure more transparency.

1. Low interest rates
the First to be announced by the Finma, the low interest rate environment. The low interest rates "increase the bubble-the risk of Price", and that this burst suddenly. Also, make certain business models generally out of the question. Interest rates remain at the current low level of certain business models hardly have a future. This was especially true for banks with a focus on the interest differential business and life insurance.

Many banks have started to admit negative interest rates for cash contributions to a larger group of customers can be according to the Finma to a risk. The supervisor is not called, although the risk of Bankruns, so that many customers withdraw their money, but she writes that it is difficult to estimate, such as the penalty interest act on the customers.

2. Bubble in the mortgage market
For some time now, Finma and the Swiss national Bank (SNB) to warn of the dangers in the mortgage market. So also in the new report. "The sharp rise in vacancy rates in Residential investment property and the continued brisk construction activity will exacerbate the risks in the Swiss real estate and mortgage market," it is said. However, the investors are looking for because of the low interest rate environment, the more desperately seeking systems with higher yields. "That's why you invest, in spite of increasing vacancy rates and falling Rents increased in real estate", Finma.

The supervisor for further measures, therefore, you will have to look at those financial institutions stronger, to grow in the mortgage business. In addition, you will want to carry out the insurance a stress test, in order to its risks, your real estate and mortgage transactions assess.

3. Risk of hacker attacks
On other hazards, the report is shorter. Such as the risk of hacker attacks. So a successful cyber attack can have serious consequences for the Swiss financial could have the place. "For example, could not or only delayed to be performed in the event of a cyber attack on financial services under the circumstances."

hackers can penetrate the System of the banks and harm you. Photo:

4. To slow say goodbye to the Libor rate
The reference rate, the Libor is. He was manipulated by several banks for many years and should therefore be replaced. Succession solutions such as the Saron are in the pipeline. However, the replacement of the LIBOR, many banks are is intended, apparently, heavier than. According to the Finma three risks: legal risks, valuation risks and risks in connection with the operational readiness and threaten. This means that the new Reference rate is there, but the banks are with the introduction in arrears or have not yet realised what is in store for them.

5. Forever, the money laundering
What was once a minor offense, lures could be due to the difficult economic situation of some banks to the risk: the money Laundry. "Due to shrinking margins, financial institutions could make the business decision profitable new customers in relatively high-risk emerging countries with high corruption, the rich risk to be incorporated", it means it is in the Finma report. The recent scandals, such as the Malaysian state Fund 1MDB, or to the Petrobras group in Brazil, would show that the risks in cross-border asset management business remain high. This despite the fact that many institutions see better.

Due to technical progress, new dangers threaten here also. New technologies can be used to circumvent the previous rules. "Maladministration in the Fintech sector financial institutions, could adversely affect the Reputation of the financial centre is strong and the developments in the Wake of the digitization of the brakes."

6. No market access
The Swiss financial centre is an export industry. Therefore, he is dependent on him abroad, the doors are open. That could change, according to Finma under certain circumstances. Including would then suffer the business of the banks.

The Skyline of Frankfurt is drawn by the high concentration of companies in the financial sector. Photo:

7. The climate is at risk
Surprisingly, the Finma has come to the conclusion that the climate change financial risks can come in the financial space. This is because the banks could detect late how strong a company is suffering from climate change. As a result, its shares could lose much of their value, or they could no longer service their loans. The hazards should be recognized then, it could be too late.

"It is not inconceivable that the markets would have priced in the risks that are described in late, but with strong adjustments," writes the Finma. The price shock would then have a negative effect on the asset Manager.

Created: 10.12.2019, 10:01 PM