Banks Bankers Association takes a critical view of "too-big-to-fail" measures

The Swiss Bankers Association (SBA) is critical of a number of the measures proposed by the Federal Council for systemically important banks. For example, a tightening of the capital adequacy requirements should not restrict competitiveness for no reason.

This was stated by an SBA representative at a media conference in Zurich. It is certainly right to learn the lessons from the CS debacle, said SBA CEO Roman Studer on Thursday.

However, Studer was convinced that the result of the current "wave of regulation" would affect the Swiss financial center for the next two decades. Around half of the measures proposed in the Federal Council's report affect not only systemically important banks, but all banks.

The industry association is particularly critical of the proposed measures relating to capital adequacy - including the measures to increase capital backing for equity investments. Although there are arguments for "tweaking certain things", Studer conceded. However, if all the proposals were combined, the capital requirements for the big bank UBS would increase to such an extent that its competitiveness could be restricted.

The industry association also does not agree with the demands for greater powers for the financial market supervisory authority Finma. These include, for example, Finma's authority to impose fines or the possibility of early intervention by the banks. The SBA is also critical of the expansion of Finma's resources.

On the other hand, industry representatives are in agreement with the proposals to improve the supply of liquidity. "This is the measure that will help the most," said Studer. The introduction of a "public liquidity backstop" is also supported by the SBA. With regard to measures on corporate governance, the responsibility of individual managers and remuneration, the SBA supports "targeted adjustments".

The final assessment of the proposed measures is still pending the report of the Parliamentary Commission of Inquiry (PUK) into the CS crisis, said Studer. The PUK report should be presented by the end of the year.

SDA