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���������ֳ�-London-21 June 2012: ���������ֳ� has affirmed Switzerland's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'AAA'. The Outlook on both ratings is Stable. ���������ֳ� has also affirmed the confederation's Short-term rating at 'F1+' and Country Ceiling at 'AAA'.

Switzerland's IDR reflects the country's advanced, diversified and wealthy economy, supported by a track record of low and stable inflation, and macroeconomic stability. The economy has sustained resilient growth despite the global financial crisis, rebounding quickly from a contraction in 2009. Well managed public finances, strong institutions, and a solid net external creditor position further reinforce the confederation's top rating.

The federal debt brake rule has strengthened public finances since its implementation in 2003, with central government debt falling to 19.5% of GDP in 2011 (2003: 28.3%). Various debt reduction policies in the cantons have also resulted in general government debt dropping to 36.5% of GDP (2003: 54.9%). This has increased the room for fiscal manoeuvre in the event of a severe economic downturn. However, significant reforms need to be made to curb the effects of an ageing population on Switzerland's public finances, which the Swiss authorities estimate will see general government debt rise sharply after 2020 if left unmitigated.

External finances are also a rating strength. The Swiss economy is a large net external creditor (the third-strongest among 'AAA' rated sovereigns after Luxembourg and Singapore) to the tune of 119% of GDP in 2011, primarily reflecting the significant net external credit position of the non-bank private sector and public sector. The economy has also maintained a healthy current account surplus for over two decades, with a five-year average of 8.7% of GDP.

The Swiss banking system remains large at 5x Swiss GDP, despite significant deleveraging (mainly at its two largest banks) since the global financial crisis. Higher capital requirements under Basel III, the so called 'Swiss finish' and progress in drafting 'living wills' for banks considered 'too big to fail' are reducing contingent liabilities on the Swiss public finances.

The eurozone crisis has also been a drag on the Swiss economy. Real GDP growth decreased slightly to 2.1% in 2011 as the Swiss franc appreciated sharply and demand for Swiss exports from the eurozone declined. The SNB's policy to establish an exchange rate floor for CHF/EUR of 1.2 has mitigated the impact on the Swiss economy. However, a material intensification of the crisis could place downward pressure on the Swiss rating given the strong economic and financial linkages to the eurozone.

In addition, real estate prices have been rising steadily over the past decade. The potential overheating of the mortgage and real estate sector would pose significant downside risks to the banking system, and could also weigh on the rating.

Contact:

Primary Analyst
Eugene Chiam
Research Analyst
+44 (0) 20 3530 1512
���������ֳ� Limited
30 North Colonnade
London E14 5GN

Secondary Analyst
Douglas Renwick
Senior Director
+44 (0) 20 3530 1045

Committee Chairperson
Shelly Shetty
Senior Director
+1-212-908-0324

Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com.

Additional information is available at .

The ratings above were unsolicited and have been provided by ���������ֳ� as a service to investors.

Applicable criteria, 'Sovereign Rating Methodology', dated 15 August 2011, and 'Country Ceilings' dated 15 August 2011 are available at

Applicable Criteria and Related Research: