2023-06-11 02:29:02
Bern (awp/ats) – Market perspective should carry more weight when ranking a bank in the future, according to Swiss National Bank (SNB) boss Thomas Jordan. Because it takes into account future profitability, he explains in the Sunday press.
The Credit Suisse case showed it: the stock market value of CS was much lower than its book value, continues the head of the SNB in the weekly SonntagsZeitung.
The “too big to fail” regulation should also take into account the speed of money outflows. Thus, in the future, bank deposits should not all be able to be withdrawn almost simultaneously. “A significant proportion of deposits with banks in the future should be subject to notice periods or be held for a term,” says Thomas Jordan.
Banks should also better prepare for withdrawals by keeping more assets available on their balance sheets. If necessary, they might deposit them as collateral with the SNB in order to obtain liquidity aid.
The SNB cannot guarantee a bank’s deposits, but it can give cash once morest collateral, says Mr Jordan. “Cash aid alone cannot restore confidence, he says, however. The fall of Credit Suisse is explained quite simply by a loss of confidence in the bank”.
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