The Swiss National Bank has published its 2016 Financial Stability Report, noting that prolonged period of low rates carries risk for global financial stability.SNB also notes that economic and financial conditions for the Swiss banking sector have become more difficult over the last 12 months. The Central Bank adds that imbalances on real estate markets are apparent in several countries and banks' profitability is under pressure. SNB also observes that subdued international demand and the strong franc have continued to weigh on economic growth.Official Report"The SNB's baseline scenario assumes that economic conditions for the Swiss banking sector improve. Economic growth picks up moderately in the euro area, but unemployment remains high in many member states. In the US, growth remains robust. Growth in China slows further and some major emerging markets remain in recession. In Switzerland, the recovery continues and unemployment begins to decline slowly after peaking in the second half of 2016.""In addition to the baseline scenario, the SNB uses four adverse scenarios to assess banking sector resilience against unlikely, highly unfavourable but possible developments in economic and financial conditions. Under the first adverse scenario, the euro area debt crisis re-escalates, resulting in widespread financial and banking stress, a recession, and a further postponement of the normalisation of monetary conditions.""The second scenario assumes a major crisis in emerging markets, comparable to the crises in the second half of the 1990s. Under the third scenario, the US enters a deep recession, which is transmitted to the rest of the world. The fourth scenario analyses the impact of a rapid normalisation of global monetary policy."