We have observed a trend of rising residential real estate prices in Switzerland. In our view, this poses a risk for domestic-oriented banks like Banque Cantonale Vaudoise (BCV), which has a sizable mortgage loan portfolio. We are revising our outlook on BCV to negative from stable and affirming our 'AA/A-1+' ratings. The negative outlook reflects that we might lower the ratings on BCV if the growing economic imbalance were to lead us to a more negative view of the economic environment in which Swiss banks operate. On July 3, 2012, Standard&Poor's Ratings Services revised its outlook on Switzerland-based Banque Cantonale Vaudoise (BCV) to negative from stable. At the same time, we affirmed the 'AA/A-1+' and long- and short-term
