‘Too Big to Fail’ risk acceptable at largest Swiss cantonal bank
Zurich Cantonal Bank is no longer a risk to the Swiss economy.
KEYSTONE
The Swiss financial regulator has approved plans by the country’s largest cantonal bank to wind up in an orderly manner should it go bust. Large-scale banks must satisfy the regulator that their insolvency would not significantly damage the economy.
Do you want to read our weekly top stories? Subscribe here.
The Swiss Financial Market Supervisory Authority, FINMA, declared itself satisfied with Zurich Cantonal Bank’s (ZKB) emergency plan. The bank issued the necessary additional loss-absorbing funds in the form of loss-bearing bonds in 2023, according to the communiqué. The other requirements had already been met.
According to FINMA, Postfinance, on the other hand, still does not meet the requirements for additional loss-absorbing funds. In the meantime, however, it has submitted a binding plan to build up these funds.
There is no change in the assessment of Raiffeisen’s emergency plan – already judged to be feasible last year.
The new UBS has not yet been assessed. The bank has said it will revise its crisis preparedness due to the takeover and integration of Credit Suisse. UBS will then submit its plans for restructuring and liquidation, plus stabilisation and emergency planning, to FINMA. The regulator will examine these measures and make a separate decision later.
Systemically important banks must submit an emergency plan to FINMA every year for assessment. They must show how the systemically relevant functions could be continued in the event of a risk of insolvency.
At Raiffeisen and ZKB, systemically important functions are the short-term lending business. At all three banks – including Postfinance – deposit business and payment transactions are considered systemically important.
This news story has been written and carefully fact-checked by an external editorial team. At SWI swissinfo.ch we select the most relevant news for an international audience and use automatic translation tools such as DeepL to translate it into English. Providing you with automatically translated news gives us the time to write more in-depth articles.
If you want to know more about how we work, have a look here, and if you have feedback on this news story please write to english@swissinfo.ch.
Translated from German by DeepL/mga
Popular Stories
More
Life & Aging
Zurich: how the world capital of housing shortages is tackling the problem
In Switzerland more people are being referred to electrical therapies or psychedelic-assisted psychotherapy. Are there similar approaches where you live?
This content was published on
A Geneva-registered tourist plane grazed some ski mountaineers on Saturday on a glacier on the Swiss side of the Monte Rosa massif.
Sharp rise in reports of suspicious sports betting in Switzerland
This content was published on
Last year the Intercantonal Gambling Supervisory Authority received 184 reports of suspicious activities in connection with 166 sports competitions.
Swiss fencers apologise for diplomatic scandal with Israel
This content was published on
Two days after causing a diplomatic scandal at the U23 European Championships in Tallinn, the Swiss fencers responsible have published a jointly signed apology on Instagram.
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.