Credit Suisse and UBS make progress on financial stability
The two major Swiss banks Credit Suisse and UBS have made progress in terms of stability in the face of possible financial crises, the financial market policeman Finma noted on Thursday.
Credit Suisse and UBS on Paradeplatz, Zurich.
Sonja Mulitze
The other national establishments of systemic importance, on the other hand, were reprimanded, their emergency plans being deemed “unexecutable”.
“We are seeing further progress in the stabilization and liquidation planning of the institutions concerned,” said Rupert Schaefer, head of the stabilization and liquidation division at Finma. But according to the latter, “additional efforts are necessary to complete the planning work ‘too big to fail'”, in reference to the institutions of major importance for the Swiss financial system.
UBS and Credit Suisse have shown “additional progress” in their bailout plans, aimed at creating the conditions for a cleanup or exit from the market through orderly bankruptcy in the event of a crisis. The Swiss Financial Market Supervisory Authority (Finma) has also approved their stabilization plans, she added in a press release.
The latter considered that “the Swiss emergency plans of Credit Suisse and UBS are executable”.
Finma has also accepted the stabilization strategies of the central counterparty of the Swiss stock exchange SIX x-clear and of the central depository SIX SIS. But certain conditions “must be met by mid-2022”, warned the regulator. SIX x-clear, which provides clearing services for the Zurich financial centre, must therefore be able to temporarily continue its critical functions for a maximum of six months as part of a complete liquidation of activity.
Not enough equity set aside
Postfinance, Raiffeisen and the Zürcher Kantonalbank (ZKB) – all three classified as nationally active banks of systemic importance – on the other hand received lower ratings from Finma. Their emergency plans are “unexecutable”, she harshly judged.
“So far, none of these banks have reserved enough loss-absorbing capital to be able to be recapitalized and continue their operations in the event of a crisis,” said the Swiss regulator.
Raiffeisen and ZKB certainly have sufficient capital to meet the requirements of the emergency plan. But neither bank has reallocated capital for crisis situations.
As for Postfinance, the financial arm of the yellow giant, its plans for building up financial reserves for use in the event of a crisis depend in part on the ongoing revision of the law on the organization of La Poste and the capitalization guarantee from the Confederation. .
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