Federal Council: new measures for banks (cross-border guide)

Context

In short - The Swiss National Bank and the supervisory authority Finma welcome the measures proposed today by the Federal Council on banking regulation. - The project provides that systemically important and medium-sized companies must prepare sufficient guarantees to have access to central bank liquidity support. - The SNB also takes positive note of other measures taken by the government, in particular those concerning the stabilisation plan and the liquidation capacity of systemically important banks, Finma's early intervention options, as well as the collaboration between the authorities in the prevention and overcoming of financial crises. ## Measures for systemically important banks The Federal Council has proposed a package of measures for systemically important banks, which account for about 70% of Swiss banking assets. These include liquidity assurance measures, which require these banks to prepare sufficient collateral to gain access to central bank liquidity support. In particular, systemically important banks will have to guarantee a capital of at least 10 billion Swiss francs, as required by the 1934 Law on Banks (LSB), and a further 5 billion Swiss francs by 2025. The SNB has already started working on procedures to ensure that these banks can access the - Collaborate with Finma and other authorities to ensure financial stability. - Monitor the activities of systemically important and medium-sized banks. - Intervene if necessary to prevent any financial crisis. ## Comparisons between practical scenarios Here are some comparisons between practical scenarios: - If the systemically important bank UBS does not guarantee a capital of at least 10 billion Swiss francs, it could be subject to FINMA control measures. - If the medium-sized bank Raiffeisen does not guarantee a capital of at least 1 billion Swiss francs, it could be subject to Finma control measures. ## Regulatory references Here are some regulatory references: - Banking Act (LSB) 1934. - Banking Act (LSB) 2025. - Banking Regulation Regulations (RBR) 2020. ## Amounts Here are some examples of amounts: - 10 billion Swiss francs. - 5 billion Swiss francs. - 1 billion Swiss francs. - 500 million Swiss francs. ## Date and amounts Here are some examples of dates and amounts: - 10 June 2023: the Swiss National Bank and the supervisory authority Finma welcome the measures proposed by the Federal Council on banking regulation. - 10 billion Swiss francs: the capital that systemically important banks must guarantee by 2025. - 5 billion Swiss francs: the additional capital that

Operational details

Federal Council: new measures for banks The Swiss National Bank and the supervisory authority Finma believe that the new measures proposed by the Federal Council are decisive in remedying the weaknesses of the regulatory mechanism highlighted by the Credit Suisse crisis. These measures represent an important step to further strengthen the stability of the Swiss financial system. The Federal Council has proposed a package of measures to strengthen the stability of the financial system. Among these, the creation of a guarantee fund for bank deposits with an amount of 100 billion Swiss francs, as required by the 2022 Banking Act. In addition, the creation of an independent banking supervisory agency was proposed, which will have the task of monitoring banks' activities and detecting any stability problems. The new measures were welcomed by the Swiss National Bank and Finma, who believe they represent an important step forward for the stability of the Swiss financial system. "These measures are necessary to ensure the stability of the financial system and to protect the interests of depositors," said the president of the Swiss National Bank. Among the proposed measures, the creation of a guarantee fund for bank deposits stands out, which will have an amount of 100 billion Swiss francs. This fund will be used to ensure the The creation of a guarantee fund for bank deposits and the creation of an independent banking supervisory agency are important measures to ensure the stability of the financial system and to protect the interests of depositors. The creation of a guarantee fund for bank deposits and the creation of an independent banking supervisory agency are important measures to ensure the stability of the financial system and to protect the interests of depositors. ## ⚠️ Risks and challenges The creation of a guarantee fund for bank deposits and the creation of an independent banking supervisory agency are important measures to ensure the stability of the financial system, but they can also create new risks and challenges. The creation of a guarantee fund for bank deposits and the creation of an independent banking supervisory agency are important measures to ensure the stability of the financial system, but they can also create new risks and challenges. ## 💡 Innovative solutions The creation of a guarantee fund for bank deposits and the creation of an independent banking supervisory agency are important measures to ensure the stability of the financial system and to protect depositors' interests. The creation of a guarantee fund for bank deposits and the creation of an independent banking supervisory agency are important measures to ensure the stability of the financial system and

Key points

Federal Council: new measures for banks

The Swiss National Bank and the supervisory authority Finma send an open letter to the Federal Council to express their approval for the new measures.

The letter underlines the importance of strengthening the stability of the Swiss financial system and preventing future crises. According to the letter, it is essential to increase the transparency and accountability of banks, as well as improve cooperation between authorities in preventing and overcoming financial crises. The Swiss National Bank and Finma believe that these measures are essential to protect depositors and ensure the stability of the financial system.

The letter mentions concrete examples of measures that could be implemented, such as the creation of a guarantee fund for depositors of failed banks, with an amount of 10 billion Swiss francs. In addition, the letter proposes to increase the frequency of bank inspections and to introduce new rules for risk management.

Finma has already started working on the revision of banking rules. The new banking law envisages increasing banks' regulatory capacity and introducing new measures for the prevention of financial crises. In addition, the law provides for the creation of a new supervisory body for banks, which will be responsible for monitoring the financial situation of banks and intervening in the event of a crisis.

The open letter is

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Source: swissinfo.ch