Switzerland: Financial Sector Assessment Program-Technical Note on Macroprudential Policy and Real Estate Risks

The institutional setup for macroprudential policy needs to be improved to support effective responses to systemic risks. Unchanged since the 2019 FSAP, the SNB oversees macroprudential matters and makes Countercyclical Capital Buffer (CCyB) proposals but lacks voting power on CCyB decisions. Neither the SNB nor FINMA, nor any existing inter-agency committee, hold a formal mandate to recommend adjustments to the Swiss macroprudential toolkit when current tools prove inadequate for addressing systemic risks, leading to an inaction bias. Swiss authorities should establish a dedicated macroprudential committee, chaired by the SNB, to discuss and jointly decide on policies. Such committee could improve macroprudential communication, enhance public accountability, mitigate inaction risks, and advise relevant agencies on the toolkit's adequacy and necessary changes.