Moody's maintains stable outlook on Switzerland's banking system

In its latest review of the Swiss banking and financial sector, the US ratings agency, Moody’s Investor Service, maintained its stable outlook on the Swiss banking system.

Key Points:

“Moody's Investors Service has maintained its stable outlook on the Swiss banking system, reflecting the rating agency's expectation of solid operating conditions despite the challenges of low interest rates and house price inflation”

“The outlook expresses Moody's expectation of how bank creditworthiness will evolve in Switzerland over the next 12-18 months”

"Swiss banks continue to have very low problem loan ratios and sound capital buffers, as well as limited reliance on confidence-sensitive capital market funding and adequate loss absorption capacity" 

“Stable operating conditions in Switzerland will support the country's banks over the outlook horizon; as noted in June 2016, Moody's expects Swiss GDP to grow 1.4% in 2016 and around 1.8% in 2017, up from 0.8% in 2015”

“In addition, unemployment will likely remain low, according to the rating agency”

“However, the main challenges for Swiss banks over the next 12-18 months result from persistently very low, and even negative, interest rates -- the Swiss National Bank's base rate is -0.75 -- as well as sustained, albeit slowing, property-price inflation”