SNB Reviewing Steps to Calm Housing Market, Danthine Says

The Swiss National Bank is part of a group looking into possible additional steps to prevent Switzerland’s real-estate market from overheating, central bank Vice President Jean-Pierre Danthine said.

“We believe the time is ripe to explore such alternative measures,” Danthine said at a business conference in Zurich today. The SNB was in close cooperation with financial market regulator Finma, he said.

“We have been in contact with the Swiss Bankers Association to see what is possible and justified in that direction,” Danthine added.

The Zurich-based central bank has pledged to keep the franc capped at 1.20 per euro for the foreseeable future, given low consumer-price inflation. According to Bloomberg News’s monthly survey, the minimum exchange rate will stay in place for the rest of this year at least.

As a by-product of Switzerland’s loose monetary policy, the country’s residential real-estate market is in the midst of a boom. Growth in mortgages has exceeded that of economic output since 2009, prompting the central bank to warn of an overheating.

To reduce the risk of a financial crisis, the government last month raised the amount of capital banks need to hold as a buffer to 2 percent of mortgage-related assets from 1 percent. Banks have until the end of June to comply.

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