Coronavirus: Federal Council approves deactivation of countercyclical capital buffer

Bern, 27.03.2020 - During its meeting on 27 March 2020, the Federal Council approved the proposal of the Swiss National Bank (SNB) to deactivate the countercyclical capital buffer with immediate effect. This measure gives banks more flexibility in granting credits designed to cushion the economic impact of the coronavirus pandemic.

The countercyclical capital buffer strengthens banking sector resilience in the event of corrections resulting from imbalances on the mortgage and real estate markets. At the same time, it helps to prevent these markets from overheating. It requires banks to hold additional capital for residential mortgage loans. In view of the exceptional situation caused by the coronavirus pandemic, the SNB submitted a proposal to the Federal Council requesting the immediate deactivation of the countercyclical capital buffer. The Federal Council approved this proposal at its meeting on 27 March 2020.

This measure will give banks more flexibility in their lending activities, allowing them to better meet the credit and liquidity needs of households and businesses. It complements the package of measures announced by the Federal Council to cushion the economic impact of the coronavirus pandemic.

Deactivation can take place because the threatened recession is likely to reduce overheating in the Swiss mortgage and real estate markets. In addition, it is important that the banks' lending activities comply with the Swiss Bankers Association guidelines on minimum requirements in mortgage lending, as well as the recently adjusted guidelines on residential investment property. Furthermore, the Federal Council supports the recommendations on distributions and bonuses made by the SNB and FINMA.


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Sarah Pfäffli, Communications, Federal Finance Administration FFA
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The Federal Council
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Federal Department of Finance
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Last modification 14.09.2020

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