The outstanding volume of foreign currency loans (FX lending) to private households fell by € 450 million or -3.1% adjusted for exchange rate effects in the second quarter of 2019. In absolute terms, as of 30 June 2019, € 14.11 billion is still outstanding in foreign currency loans. In only twelve months the outstanding volume, adjusted for exchange rate effects, has been reduced by € 1.76 billion or -11.3%. Since the imposing of the ban on granting of new foreign currency loans in Autumn 2008, the outstanding volume has fallen by € 33.73 billion or -72.3%. The share of foreign currency loans at the end of the 2nd quarter 2019 as a proportion of all outstanding household loans fell to a mere 9.0% during Q2 2019, a decrease of 1.2% year-on-year. At the height of the foreign currency loan boom this share stood at 31.8%. These were the findings from the FMA’s Survey for the second quarter of 2019.
Sustainable limitation of risk
“Since the height of the boom in foreign currency loans in 2008, the Swiss franc has appreciated by 49%. Times of financial uncertainty, such as those that we currently face, are usually accompanied by strong fluctuations in exchange rates. We can therefore expect a continued difficult development of the Swiss franc,” remarked the FMA’s Executive Directors, Helmut Ettl and Klaus Kumpfmüller: “We will therefore continue our successful approach of limiting risks from foreign currency loans by way of a broad range of measures. Ultimately we have already managed within ten years to reduce the percentage of foreign currency loans to all loans to private households from around one third to under one tenth, and that without destroying the stability of the financial market and impacting the confidence of consumers and borrowers alike.”
96.1% of the outstanding foreign currency loans during the 2nd quarter were denominated in Swiss francs (the remainder is almost entirely denominated in Japanese yen), with the exchange rate during this period fluctuating between CHF 1.111 and 1.147 to the Euro.
Klaus Grubelnik (FMA Media Spokesperson)
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