The Swiss Financial Market Supervisory Authority FINMA has published its 2020 Risk Monitor. In this report, FINMA wants to provide an overview of the most important risks that institutions supervised by FINMA would currently face. Furthermore, the report describes the resulting focus of FINMA’s supervisory activites.

In FINMA’s view, the topics identified as principal risks in 2019 would remain central for the supervised institutions and the Swiss financial centre. These are i) the persistent low interest-rate environment, ii) a possible correction on the real estate and mortgage market, iii) a disorderly abolition of LIBOR benchmark interest rates, iv) cyberattacks, v) money laundering as well as vi) increased impediments to cross-border market access. In addition, in the year of the Covid-19 pandemic, FINMA identified a new seventh risk vii) possible defaults or adjustments to corporate loans or bonds abroad. According to FINMA, such defaults would become increasingly likely due to health-policy measures that would result in massive downturns in numerous companies’ sales and earnings. Therefore, the threat of a global recession would be looming on the horizon.

More information: https://www.finma.ch/en/news/2020/11/20201111-mm-risikomonitor-2020/