Financial Regulatory Forum

Swiss may need laws on banks’ structure-experts

April 22, 2010

    BERNE, April 22 (Reuters) – Switzerland may have to force its large banks UBS<UBSN.VX> and Credit Suisse<CSGN.VX> to change their structure in order to limit the risks for the economy should either collapse, a government commission said on Thursday.
   In an interim report on the too-big-to-fail issue, the high-level commission suggested that lawmakers should enable regulators to force a systemically relevant bank to adopt a structure that would allow the split-off of key domestic businesses without rescuing the whole group.
   The report of the commission, which includes top-officials from the Swiss National Bank, bank regulator FINMA, also said banks should use capital instruments that allowed the conversion of debt to equity in the case of a crisis.
    Switzerland, a small country with a large financial sector, has led the global push for stricter bank rules after it had to bail out UBS, whose risky bets led to more than $50 billion in writedowns and huge losses.
   On Wednesday, regulators unveiled a new liquidity regime for the two giant banks, coming on top of already introduced tougher capital requirements, a leverage ratio and new rules on bankers’ pay.
   ((sven-markus.egenter@reuters.com; +41 58 306 7351; Reuters Messaging: sven-markus.egenter.reuters.com@reuters.net))
 Keywords: SWISS REGULATION/ 
  
Thursday, 22 April 2010 09:14:25RTRS [nWEB1445  ] {C}ENDS

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