.jpg)
ZURICH (Reuters) – Weaknesses in Switzerland’s financial regulatory framework persist after the collapse of Credit Suisse in 2023 and must be addressed, the Swiss National Bank said on Thursday.
In a state-backed bailout, Credit Suisse was absorbed by long-time rival UBS in 2023. Concerns that the enlarged lender poses risks to the economy have prompted the government to propose tougher regulations for banks deemed “too big to fail.” in April.
At the heart of the plan were proposals to make UBS hold more capital, but it still faces a long political process.
In its annual financial stability report, the Swiss National Bank said it shares the Federal Reserve’s view on the need for action on capital requirements, liquidity requirements, early intervention, recovery and resolution planning.
“The current capitalization of the merged parent UBS is stronger than that of parent Credit Suisse before the crisis. However, weaknesses in the current system remain and must be addressed,” the central bank said.
The Swiss National Bank also supported a review of the liquidity coverage ratio, a key measure to measure the bank’s ability to meet its cash demands, after retail deposit outflows during the Credit Suisse crisis were larger and faster than the assumed ratio.
The Swiss financial regulator said on Wednesday that UBS’s takeover of Credit Suisse did not create any competition concerns, despite recommendations by the country’s antitrust watchdog that the matter merited further scrutiny.
