‘Too Big to Fail’ risk acceptable at largest Swiss cantonal bank
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.
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.
Swiss study: insects mainly migrate at midday and dusk
This content was published on
A study led by the Swiss Ornithological Institute in canton Lucerne is helping to better understand the movement patterns of migratory insects.
Red Cross: 22 staff killed in Middle East since October
This content was published on
The Red Cross and Red Crescent network in Gaza and Israel has lost 22 staff members since last October, the Swiss Red Cross (SRC) said on Wednesday.
Dortmund’s Kobel is first Swiss goalie in Champions League final
This content was published on
Borussia Dortmund’s Gregor Kobel has achieved history by becoming the first Swiss goalkeeper to reach a Champion’s League final.
University students in Switzerland join Gaza protest wave
This content was published on
Pro-Palestinian activists occupied university buildings in Lausanne, Geneva and Zurich on Tuesday, widening the protest movement in the Alpine nation.
TradeXBank to resume full operations after Sberbank Switzerland taken off sanctions list
This content was published on
TradeXBank, the former Swiss branch of Russia’s Sberbank, will be able to resume its dollar-denominated activities from the second half of this year.
Geneva decides not to remove controversial memorials
This content was published on
The city of Geneva has presented an action plan regarding a series of controversial local statues and monuments of historical figures linked to racism, colonialism or slavery.
University of Lausanne calls for end to pro-Palestine sit-in
This content was published on
The pro-Palestinian occupation continues at the University of Lausanne (UNIL). On Monday evening, a group of students refused to agree to the deadline set by the rectorate.
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.