Cooperative lender Raiffeisen has joined the list of banks considered “too big to fail” for the good of Switzerland’s financial system. The Swiss National Bank (SNB) announced the upgrade on Wednesday.
Raiffeisen joins the ranks of banking giants UBS and Credit Suisse, as well as the Zürcher Kantonalbank (ZKB), which was added to the SNBexternal link’s list of systemically relevant institutions last November.
Now it will face stricter regulatory requirements, such as setting aside a more substantial cushion as a buffer against any potential market upsets.
Raiffeisenexternal link has 350 branches and a balance sheet of CHF183 billion ($202 billion), making it one of Switzerland’s largest banking service providers.
“Raiffeisen's strong market position in domestic deposits and loans was decisive in [the SNB’s] decision,” Raiffeisen said in a statement. Now the bank will consult with the Swiss Financial Market Supervisory Authorityexternal link (FINMA) about the next steps.
Swiss “too big to fail” legislation, which came into force in 2012, demands that these banks cover at least 4.5% of all assets with capital reserves.
swissinfo.ch and agencies