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Swiss propose liquidity rules costing banks little or nothing extra By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO – The Headquarters of Swiss Bank Credit Suisse can be seen alongside a UBS branch at the Paradeplatz, Zurich, Switzerland. March 23, 2021. This picture was taken by a drone. REUTERS/Arnd Wiegmann

By Brenna Hughes Neghaiwi

ZURICH (Reuters) – Switzerland proposed updated rules to ensure major banks hold enough liquidity to absorb shocks, but the draft changes will cost banks little or nothing in additional capital and liquidity holdings, government documents showed on Thursday.

The proposed revisions, which were sent into consultation on Thursday, aim to ensure that systemically important banks (SIBs) — which include Credit Suisse (SIX:) and UBS — remain resilient under various stress scenarios, including in some cases not adequately covered by current rules, the government said.

The finance ministry reported that the new liquidity requirements for SIBs would introduce stricter requirements than the TBTF regulation currently in effect. However, authorities believe this proposal will not have any significant impact on the existing high levels of liquidity.

The proposal, according to the current estimates would neither significantly increase nor reduce overall liquidity held by banks that are systemically significant.

According to the ministry, there was no material effect on bank capital costs.

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