Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​​

I AGREE
Rating Action:

Moody's affirms Switzerland's Aaa rating and maintains a stable outlook

02 Dec 2016

New York, December 02, 2016 -- Moody's Investors Service has today affirmed the Aaa government bond rating and issuer rating of Switzerland and has maintained a stable rating outlook.

RATINGS RATIONALE

The key drivers for the affirmation of the Aaa rating and the maintenance of the stable outlook are the following:

1) Switzerland's economic resilience, which is based on the country's very high economic and institutional strengths as well as a high degree of economic diversity, wealth and flexibility that allowed the country to withstand the global financial crisis, the euro area debt crisis and, more recently, the appreciation of the Swiss franc.

2) Switzerland's very high fiscal strength, supported by roughly balanced annual budgets and a general government debt-to-GDP ratio below 35%.

3) Significant progress by the Swiss authorities in mitigating the risks stemming from the country's large banking system, including domestic and international regulatory reforms.

Switzerland's long-term country ceilings for local and foreign currency bond and bank deposits remain at Aaa. Its short-term country ceilings for foreign-currency bonds and bank deposits also remain at Prime-1 (P-1).

FIRST DRIVER: SWITZERLAND'S EXCEPTIONALLY STRONG ECONOMIC RESILIENCE

The first driver of the rating affirmation and maintenance of the stable outlook is the country's robust economic resilience, as demonstrated by the relatively modest impact on its economic growth and competitiveness trajectories from global, regional and country-specific challenges over the past decade. In Moody's view, this broad-based resilience derives from a combination of intrinsic country strengths, including the diversity of the economic base, high average wealth and flexibility.

The size of Switzerland's economy in 2015 was 11% higher in real terms (own currency) than in 2007, demonstrating stronger performance than those of other Aaa/stable-rated sovereigns such as Netherlands, Germany and the United States (all Aaa stable), which were 3%, 7% and 10% larger, respectively. Such resilience is based on Switzerland's open and well diversified economy, which is both a major financial service center and an important producer of chemicals, pharmaceuticals and other high-value added manufactured goods.

With respect to wealth, Switzerland's average per-capita income is substantially higher than the Aaa median. On a purchasing power parity (PPP) basis, Switzerland's 2015 GDP per-capita, at $58,647, was higher than the income in the United States ($55,805), and European peers such as the Netherlands ($49,166), Germany ($46,974) and Sweden ($47,922) (all Aaa stable), and fared also above the Aaa median ($48,544). Furthermore, a significant gap in favor of Swiss citizens is registered with respect to accumulated wealth, partly reflecting its three-pillar pension system.

Institutional resilience is evidenced by the consistency of macroeconomic policy norms and the proactive response to various challenges as they emerged over the past decade. Such policy responsiveness has cemented economic and financial stability. Moreover, the country's very high level of competitiveness is reflected in international surveys like the Global Competitiveness Index by the World Economic Forum, according to which Switzerland has consistently ranked as the top performer over the past eight years. Switzerland's current account has remained in substantial surplus for decades, such that the country's net international investment position (NIIP) has exceeded 100% of GDP over most of the past decade compared to Germany's NIIP surplus of 49% of GDP and the US' net IIP deficit of 41% of GDP in 2015.

SECOND DRIVER: SWITZERLAND'S VERY HIGH FISCAL STRENGTH

The second driver behind Moody's decision to affirm Switzerland's Aaa rating and to maintain the stable outlook is the strength of the government's finances and near-balanced annual fiscal position. The government's track record of adhering to strict fiscal rules has placed its general government debt-to-GDP ratio on a steady downward trajectory for more than a decade, such that the ratio dropped from a peak of 50.7% of GDP in 2003 to an estimated 34.1% of GDP in 2015, among the lowest of all Aaa-rated sovereigns. The results underscore the country's resilience to economic challenges faced elsewhere in the region and its status as a safe haven for investment.

Still, similar to the situation in most other advanced and many emerging market economies, the aging of the Swiss population will challenge the public pension system and in turn, the government's finances, particularly when Swiss pension funds will struggle to generate sufficient investment income to meet their obligations in an environment of historically low and even negative rates of interest. The government has therefore continually pursued reforms to preserve the financial viability of the pension system, having introduced adjustments meant to avoid the need for drastic tax increases to cover higher health and old-age expenses as demographics deteriorate. Nonetheless, the Federal Department of Finance projects that age-related expenditures of the general government will increase to 20.8% of GDP by 2045, 3.5 percentage points higher than in 2013, on unchanged policies. Accordingly, yet another reform (AV2020) meant to improve the pension system's viability is being actively discussed in parliament with a view to being introduced starting in 2018 following its presumed approval in a popular referendum.

Moody's notes that the Swiss government's adjustment capacity is significant, with no major constraints on its ability to generate additional revenue or restrain expenditures and ready access to finance in the event of need. Under the rating agency's baseline assumptions for growth and in light of the government's track record of proactive policymaking, Moody's expects Switzerland's public debt ratio will remain low and continue to decline modestly in coming years while the challenges facing its pension funds will be very gradually addressed.

THIRD DRIVER: CAREFUL MANAGEMENT OF RISKS EMANATING FROM THE VERY LARGE FINANCIAL SYSTEM

The third driver of the decision to affirm Switzerland's Aaa rating and to maintain the stable outlook reflects the government's careful management of risks and the implementation of regulations that have reduced the potential vulnerabilities emanating from the very large Swiss financial sector. The authorities' actions during the financial crisis provide evidence of their willingness and ability to act quickly and decisively when a major bank needed assistance. Switzerland also has been at the forefront of establishing a bank resolution framework with significant loss-absorbing capital requirements, and is in the process of tightening these rules further.

The Swiss banking system is exceptionally large, although deleveraging and economic growth has reduced its size from almost 650% to under 500% of GDP since 2007. Given the system's scale, the strength of banking supervision and regulation is a key element in ensuring financial and economic stability. Measures implemented by Swiss authorities in conjunction with self-regulation by the domestic banking sector since the financial crisis have significantly strengthened the resilience of domestic banks.

Banks are required to comply with a wide range of regulations covering capital adequacy, large exposure, liquidity, leverage ratio and other norms. Most importantly, "too-big-to-fail" regulations have been strengthened further recently. In May 2016, the going-concern capital requirements for the two global systemically important banks, UBS and Credit Suisse, are being raised to 14.3% against risk-weighted assets. At the same time, their leverage ratio will be raised from 3% to 5%. These new requirements entered into force on 1 July 2016, with a phase-in period until 2019.

RATIONALE FOR STABLE RATING OUTLOOK

The stable rating outlook reflects Moody's view that Switzerland will effectively address its two main credit challenges: the effective management of the remaining risks related to its very large banking sector, and the maintenance of access to the EU single market, which could be affected by the implementation of restrictions on immigration which are required due to the respective 2014 initiative.

As mentioned, with respect to the former, Switzerland has successfully implemented an operational bank resolution framework for resolving failing banks in Switzerland that allows burden-sharing with creditors (bail-in). Moody's therefore believes that the Swiss authorities are likely to use their resolution powers, shifting the cost of future bank failures to unprotected creditors rather than to the taxpayer.

With respect to its relationship with the EU, the pursuit of a solution on implementing the immigration initiative is ongoing. In Moody's view, the trade relationship with the EU is too important to be endangered, hence we expect that eventually a compromise will be reached, maintaining Switzerland's access to the EU single market.

WHAT COULD CHANGE THE RATING DOWN

Although unlikely given the stable outlook, a significant deterioration of debt metrics in absolute and relative terms that would have a negative impact on Switzerland's debt affordability would place downward pressure on the stable outlook and, if substantial, the Aaa rating itself.

GDP per capita (PPP basis, US$): 58,647 (2015 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 0.8% (2015 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): -1.3% (2015 Actual)

Gen. Gov. Financial Balance/GDP: 0.1% (2015 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: 11.1% (2015 Actual) (also known as External Balance)

External debt/GDP: [not available]

Level of economic development: Very High level of economic resilience

Default history: No default events (on bonds or loans) have been recorded since 1983.

On 30 November 2016, a rating committee was called to discuss the rating of the Switzerland, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have materially increased. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. The systemic risk in which the issuer operates has not materially changed. Other views raised included: The issuer's institutional strength/ framework have not materially changed.

The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2015. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Kristin Lindow
Senior Vice President
Sovereign Risk Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Yves Lemay
MD - Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.