Zürich The Swiss government wants to facilitate the restructuring of systemically important banks with a state liquidity guarantee. In order to increase the confidence of market participants in the ability of an institution to survive, a so-called public liquidity backstop should be available in the future, as the finance department announced on Friday. This instrument helps to ensure that market participants are willing to maintain business relationships with the bank in question. This can prevent the need for liquidity assistance at all. It is not regarding a government bailout of systemically important banks, which, in addition to the big banks UBS and Credit Suisse, also include Raiffeisen, Zürcher Kantonalbank and Postfinance.
Increased liquidity requirements for institutions are expected to come into effect on July 1. Banks that have gotten into difficulties would already receive emergency liquidity from the Swiss National Bank. The third line should now be the state liquidity protection, which is already part of the international standard. The crisis instrument increases the chances of success for a restructuring and puts Swiss banks on an equal footing with their foreign competitors. The Ministry of Finance has been commissioned to draw up a concrete proposal by mid-2023.
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