SNB names PostFinance fifth ‘too big to fail’ bank
Postfinance, the financial services arm of Swiss Post, has been designated too big to fail by the Swiss National Bank (SNB). It thus joins UBS, Credit Suisse, Raiffeisen and the Zurich Cantonal Bank.
This content was published on
2 minutes
swissinfo.ch and agencies
In August 2014, the SNB began assessing whether PostFinance was too big to fail and which of its functions were of systemic importance. In its decision of June 29, the SNB declared PostFinance to be a bank that was “systemically relevant”.
This means that the bank is so important to the wider economic system in Switzerland that its demise would result in unacceptable economic damage.
The decision was taken after consultation with PostFinance and the Swiss Financial Market Supervisory Authority (FINMA) and has entered into legal effect.
The reasons given were the financial institution’s significant status in domestic deposit services and its strong position in payment transactions in Switzerland.
On June 30 Postfinance had a balance sheet total of CHF116 billion ($121 billion) and was a market leader in transaction payments. It is the semi-autonomous financial arm of the Swiss post office that was granted a licence in 2013 to trade as an independent entity.
However, all of its shares are for the time being held by the state-owned post office.
Structural changes
According to the banking law, the system relevance of a bank depends on its size, its interconnection with the finance system and the economy as well as the short-term substitutability of its services.
Banks are also deemed too big to fail if their collapse would significantly damage the Swiss economy and financial system.
As a next step, PostFinance, along with FINMA, will begin to implement the specific requirements regarding equity, liquidity, risk concentration and the development of contingency plans.
PostFinance chief executive Hansruedi Köng said at a press conference that business would continue as normal despite the new status. He said the bank would not need to raise any new capital as its capital ratio already exceeded 20%.
Switzerland’s two biggest banks, UBS and Credit Suisse, are well advanced in implementing too big to fail structural changes that split different divisions into separate legal entities, in some cases located in different countries.
Swiss climate activists block vehicles near Gotthard tunnel
This content was published on
Around ten climate activists briefly blocked the A2 motorway near the northern entrance of the Gotthard tunnel on Thursday.
Watches belonging to Michael Schumacher up for auction
This content was published on
Schumacher's family is auctioning off eight rare watches from his collection in Geneva. The Christie's auction will take place on Monday.
Joya Marleen and Baschi named best solo acts at Swiss Music Awards
This content was published on
St. Gallen singer Joya Marleen and Baschi from Basel were named artists of the year at the Swiss Music Awards 2024 on Wednesday night.
Swiss authorities announce cost-cutting in asylum sector
This content was published on
The government notably wants to improve integration into the labour force, particularly for people with protection status S.
Various leaders confirm participation at Ukraine peace conference
This content was published on
The presidents of Poland, Finland, and Latvia and the prime ministers of Spain and Belgium will be at the Swiss-hosted talks in mid-June.
This content was published on
In the winter season up to April 2024, railway and cable car operators ferried 3% more visitors compared to the previous winter, and 5% more than the five-year average.
Rhine flooding: Swiss to invest CHF1 billion with Austria
This content was published on
As part of an international agreement with Austria, the Swiss government wants to pump CHF1 billion ($1.1 billion) into flood protection measures along the Rhine over the next three decades.
Swiss government proposes CHF10 million UNRWA donation
This content was published on
After months of debate, Switzerland plans to give CHF10 million ($11 million) to the UN agency this year, rather than the CHF20 million initially foreseen.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Zurich cantonal bank branded too big to fail
This content was published on
The Swiss National Bank (SNB) turned up the heat on the Zürcher Kantonalbank (ZKB) on Monday by upgrading it to a category one “systemically relevant” institution. In other words, ZKB’s collapse would cause more pain than the Swiss economy could bear. The exact consequences for ZKB have yet to be determined by the Swiss Financial…
This content was published on
Swiss taxpayers are still haunted by the memory of being forced to shoulder the risk of rescuing UBS during the 2008 financial crisis. Despite realising an eventual financial gain from the bailout, many still fear negative consequences if there is a repeat act. Two recent parliamentary motions, designed to further restrain the biggest banks, as…
This content was published on
On Monday, US Attorney General Eric Holder said no company was “too big to jail” and pledged to pursue any institution that breaks US laws. His comments sparked rumours that he was specifically referring to Credit Suisse, which is under investigation for alleged tax evasion offences. It has emerged that the bank has adapted its…
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.