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(Bloomberg) -- UBS Group AG and Credit Suisse Group AG have improved their ability to absorb losses and are on track to meet Switzerland’s revised too-big-to-fail rules, the country’s central bank said in its annual financial stability report.

“In the look-through perspective, both banks are already fully compliant with the going-concern risk-weighted requirements,” the Swiss National Bank said in the report published Thursday. “However, they still have to improve their total loss-absorbing capacity as defined in terms of the leverage ratio.”

Switzerland last year increased the amount and quality of capital its two biggest banks have to hold relative to all of their liabilities, a measure called the leverage ratio. UBS and Credit Suisse, which have both scaled down their trading operations to focus on steadier wealth management, have until 2020 to issue bonds and build capital to comply with the rules, designed to protect the economy should one of the lenders tumble.

The regulations impose minimum levels of capital to absorb current operating losses -- going concern -- and capital to fund an orderly resolution. Switzerland introduced too-big-to-fail rules in 2012 after the government came to UBS’s rescue during the 2008 financial crisis.

Some requirements may increase in light of measures drawn up by the Basel Committee on Banking Supervision. The international body, which sets standards for the industry, wants to restrict banks’ use of internal models to evaluate risk, as this has led to inconsistency and undermined confidence in their estimates.

“The SNB supports and is committed to a swift finalization of the Basel III reform,” the central bank said.

To contact the reporter on this story: Jan-Henrik Förster in Zurich at jforster20@bloomberg.net.

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Cindy Roberts

©2017 Bloomberg L.P.

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The citizens' meeting

The citizens' meeting

The citizens' meeting