Switzerland revises liquidity rules for systemically important banks

The national flag of Switzerland flies at the headquarters of Swiss bank Bank Sparhafen Zuerich (BSZ) in Zurich, Switzerland July 31, 2019. REUTERS/Arnd Wiegmann

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BERLIN, June 3 (Reuters) – The Swiss government on Friday announced new rules for the country’s five big banks, requiring them to boost their liquidity to better cope with events such as the COVID-19 pandemic in Switzerland. ‘coming.

“The review aims to ensure that systemically important banks (SIBs) hold enough liquidity to absorb liquidity shocks and cover their needs in the event of restructuring or liquidation,” the Swiss Federal Council said in a statement announcing the change. adoption of the ordinance.

One change is that banks deemed systemically important must now hold enough cash to meet a 90-day liquidity crisis, instead of the 30-day threshold previously, the seven-member federal council said.

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The five Swiss SIBs are UBS (UBSG.S), Credit Suisse (CSGN.S), Raiffeisen, PostFinance and Zuercher Kantonalbank.

The requirements come into effect on July 1, according to the statement.

Under the new rules, the Swiss Financial Market Supervisory Authority (FINMA) could impose specific surcharges on each institution, according to the press release.

To help banks meet the new requirements, certain measures can be taken into account in the upper limit of liquidity, for example the sale of marketable securities that a bank can use to generate liquidity in the event of a crisis.

The council said some of the criticisms expressed by the banks had been taken into account when drafting the new rules.

In a statement to Reuters, Credit Suisse said it recognizes the changes to the liquidity order.

The five lenders were granted an 18-month transition period to comply with liquidity requirements.

($1 = 0.9608 Swiss francs)

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Written by Miranda Murray and Rachel More Editing by Paul Carrel and Christina Fincher

Our standards: The Thomson Reuters Trust Principles.

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