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BERLIN, June 3 (Reuters) – The Swiss authorities on Friday introduced new rules for the nation’s 5 main banks, requiring that they enhance their liquidity so as to higher climate occasions such because the COVID-19 pandemic in future.
“The revision is intended to ensure that systemically important banks (SIBs) hold sufficient liquidity to absorb liquidity shocks and cover their needs in the event of restructuring or liquidation,” the Swiss Federal Council mentioned in an announcement asserting the adoption of the ordinance.
One change is that banks deemed systemically important now have to carry sufficient liquidity to climate a 90-day liquidity disaster, as an alternative of the 30-day threshold beforehand, the seven-member federal council mentioned.
Switzerland’s 5 SIBs are UBS, Credit Suisse , Raiffeisen, PostFinance and Zuercher Kantonalbank.
The necessities come into pressure on July 1, in line with the assertion.
Under the brand new rules, the Swiss Financial Market Supervisory Authority (FINMA) may impose institution-specific surcharges, the assertion mentioned.
To assist banks meet the brand new necessities, sure measures can depend in the direction of the higher liquidity restrict, for instance the sale of marketable securities {that a} financial institution can use to generate liquidity throughout a disaster.
The council mentioned a few of the criticisms voiced by the banks had been taken under consideration when crafting the brand new rules.
In an announcement to Reuters, Credit Suisse mentioned it acknowledged the adjustments to the liquidity ordinance.
The 5 lenders have been given a transition interval of 18 months to adjust to the liquidity necessities. ($1 = 0.9608 Swiss francs) (Writing by Miranda Murray and Rachel More Editing by Paul Carrel and Christina Fincher)
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