FILE PHOTO: The logo of Swiss bank UBS is seen in Zurich, Switzerland October 25, 2018. REUTERS/Arnd Wiegmann/File Photo

ZURICH (Reuters) - Switzerland’s biggest banks, UBS and Credit Suisse, have improved their capital positions but must strengthen their crisis planning, the Swiss National Bank said on Thursday, citing conclusions of financial watchdog FINMA.

“The Swiss big banks Credit Suisse and UBS have slightly improved their capital situation overall, in spite of the moderate deterioration in economic and financial conditions”, the central bank said in its 2019 financial stability report.

“According to FINMA, further efforts by the big banks are required, to demonstrate that systemically important functions can be maintained without interruption in a crisis.”

UBS and Credit Suisse have until the end of 2019 to prepare so-called resolution plans that would prevent taxpayers from having to bail them out in the event of a crisis.

The Swiss National Bank (SNB), which helps oversee the stability of the country’s financial system, further highlighted risks to the country’s domestic banks from real estate lending and mortgage markets.

Domestically focused banks further increased their exposure to these markets in 2018, the SNB said, against a backdrop of persistent imbalances on mortgage and real estate markets and as already-high affordability risks continued to rise.

Targeted measures remain necessary to address issues in residential investment property lending, the SNB said, adding it supported new measures proposed by the government and by industry lobby Swiss Bankers Association.