2023-04-28 11:51:17
Banking regulations must be strengthened following the fall of Credit Suisse, said Friday the president of the Swiss National Bank (SNB), who also wants to ensure competition since it is also “in the interest” of the monetary institution .
“Recent events justify the need to review the regulations,” Thomas Jordan said in a speech at the SNB’s annual general meeting.
“It is important in the future that regulations force banks to hold enough assets that can be pledged or transferred at any time and without restrictions”, he added, so that these can be “used as collateral” when the central bank had to make billions available to prevent Credit Suisse from going bankrupt.
panic movement
The bank was shaken on the stock market on March 15 by a panic in the wake of the bankruptcy of the American bank SVB, which caused the central bank to throw a lifeline to it via a loan of 50 billion Swiss francs. (an equivalent amount in euros).
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But following a short respite, the crisis of confidence in the bank had accelerated, pushing the Ministry of Finance, the central bank and the supervisory authority of the markets to negotiate with UBS, its big competitor, to organize its takeover.
On March 19, UBS agreed to take it over for 3 billion francs, subject to solid guarantees from the Confederation. The SNB and the Confederation have made guarantees of CHF 109 billion available to the two banks. Added to this is a liquidity buffer of 100 billion francs that the SNB can make available.
A collapse of Credit Suisse would have “triggered a shock wave in the global financial system”, insisted Thomas Jordan, stressing that “the repercussions on the real economy would have been dramatic, in Switzerland and abroad”.
This merger, however, raises serious concerns for employment but also for competition, especially for loans to SMEs. Thomas Jordan assures that the SNB will ensure that these competition issues are “properly” taken into account, insofar as it is necessary “not only” for “Swiss households and companies”, but also for the central bank itself. even so that “monetary policy feeds through to the economy as a whole” when it changes its rates.
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