Parliament Decides on State Liquidity Aid for Banks
Published: Wednesday, Sep 6th 2023, 12:00
Aktualisiert am: Freitag, 13. Oktober 2023, 14:12
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The Swiss Parliament can decide on state guarantees for the rescue of systemically important banks, known as the "Public Liquidity Backstop" (PLB). This instrument will be used when a bank has insufficient liquid funds and the Swiss National Bank (SNB) has exhausted its options for securing liquidity. The Federal Council has approved the corresponding message to Parliament. The PLB is an internationally accepted standard for bank crises and is already in place in the UK, USA, EU, Japan and Canada. The proposed amendment to the law will transfer the relevant parts of the emergency ordinance of March 2023 into law. The PLB does not involve state participation in a bank, but rather a loan that is compensated and repaid through provision premiums, risk premiums and interest. The Federal Council has also added a lump sum payment that systemically important banks must pay to the state in advance to cover the risk. The experts' group "Bank Stability" concluded last week that the PLB should be introduced immediately according to the Federal Council's proposal.nnnnnnnnnnnnnnnnnnnnnnnnnn
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