More

    Negative Interest Rates Have ‘Detrimental Impact' on Banks & Customer Behavior: Swiss Regulator

    • Crypto assets “accentuate” money laundering risks – FINMA
    • “Persistently low-interest rates” affecting three areas – banks profitability, consumer behavior, and business models

    Switzerland’s financial regulator FINMA in its “Risk Monitor 2019” report while talking about the low interest-rate environment, cyber-risks, and market access also covered the risks posed by the cryptocurrency market in its money laundry section.

    The Swiss financial centre it says has been a wealth management hub which makes it “particularly exposed” to money laundering risks.

    The Swiss Financial Market Supervisory Authority which is responsible for financial regulation says apart from the traditional money-laundering risks, the financial industry is now also facing risks in the area of blockchain technology and crypto-assets. An area that it says is attracting growing interest from clients.

    These new technologies, FINMA says promise efficiency improvements in the financial industry but at the same time, they “accentuate” the threats posed by terrorism financing and money laundering.

    Greater potential anonymity and speed and cross-border nature of transactions are the factors contributing to these risks. Malpractice by the financial institutions active in Fintech, the regulator says could,

    “significantly damage the reputation of the Swiss financial centre and slow down the development of digitalization.”

    FINAM says, in the area of digital assets they are taking a “technology-neutral approach” but requires institutions to comply with the same high standards that apply in the other businesses.

    Impact of Negative Interest Rates

    FINMA also touched upon “persistently low-interest rates” in Switzerland and the European Union (EU) over the short and long term horizons.

    These interest rates in Switzerland, Japan, and Germany have been dropped into negative territory that is now having a “detrimental” impact on the profitability of institutions. The situation further increases the risk of asset price bubbles.

    The interest rate in Switzerland first tumbled below zero in 2011 that started with short and medium maturities but then in July 2019 these extended out to 50 years. Also, mortgage interest rates hit record lows in 2019.

    The potential results of this effect three areas, one being pressuring the profitability of banks by eroding the net interest margins. Though hard to predict customer behavior would be affected that could also “jeopardize” customer deposits as a stable source of funding for banks. If the rates were to stagnate for a very long time, FINMA says it would pose a risk to certain business models such as life insurers as well.

    Get Free Email Updates!

    *Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

    I will never give away, trade or sell your email address. You can unsubscribe at any time.

    AnTy
    AnTy
    AnTy has been involved in the crypto space full-time for over a year now. Before his blockchain beginnings, he worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    3,368FansLike
    2,785FollowersFollow
    4,136FollowersFollow

    Live Bitcoin Price & Latest BTC Charts

    Today's Latest Crypto News

    Binance CEO: Once QE Money Starts Flowing, BTC's Price Will Go Up ‘Very Dramatically'

    “Since coronavirus took over, business-wise the platform is doing really well” - CZ COVID-19, QEg, depression, and countries printing a lot of money...

    South Korean Central Bank to Roll Out Pilot Program to Test CBDC Through Dec 2021

    On April 6, South Korea’s central bank has made the announcement that it started a pilot program for assessing the logistics of a central...

    Former Goldman Sachs Fund Manager Suggests Allocating 25% in Bitcoin

    When Raoul Pal, the former hedge-fund manager who founded Real Vision first learned the coronavirus was spreading rapidly, he thought, “The whole world's f---ed,”. "I...

    PwC Report Reveals 2019's Crypto M&A's Dropped Sharply; Total Value Decreased By 76%

    The 2017 market boom led to the new era of funding in the decentralized space called ICO, however as we entered the bear market...

    How Much New Inflow Bitcoin Needs to Stay at this Price Level?

    For the last 2.5 years, $400 million of new investment each month kept BTC price at $7,000, after halving it would require just...

    BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.