Bankers Association open to closing “regulatory loopholes”
Published: Tuesday, Mar 12th 2024, 09:10
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The Swiss Bankers Association (SBA) believes that the Swiss banking center is in good shape. Following the CS emergency takeover last year, the industry association now wants to close gaps in banking regulation with "targeted" measures.
The Swiss banking center proved its stability last year despite the CS crisis, the Bankers Association announced at its annual media conference on Tuesday. The majority of Swiss banks presented strong annual results for the past year, not least thanks to increased income from the interest business.
The takeover of Credit Suisse by UBS and the measures taken by the Swiss authorities at the same time provided immediate stability, the SBA emphasizes, "Switzerland has thus averted an international financial crisis on its own". The CS takeover was made possible by the "Too Big to Fail" (TBTF) regulations.
Responsibility regime
However, the SBA admits that there were also gaps in the regulations: The association sees a need for action, for example, in the rapid provision of liquidity for banks that are still solvent and can no longer refinance themselves on the market. Furthermore, a "public liquidity backstop" (PLB) should also be introduced in Switzerland for the restructuring of systemically important banks.
The Bankers Association is also in favor of a responsibility regime for bank managers ("senior manager regime"), as already called for by FINMA, as well as the obligation to have a "long-term remuneration policy". In the press release, the industry association expresses its openness to more powers for the financial market supervisory authority Finma, "provided that there is a need for action as part of the investigation".
In contrast, the Association considers the capital requirements for systemically important banks to be sufficient: The SBA emphasizes that it does not see a blanket need for tightening.
Solid 2024
According to a new industry forecast, Swiss banks can expect a "solid" performance in the current year 2024, despite the rather sluggish economy in Switzerland. Although a decline in the interest business is expected, this should be offset by a stronger commission and services business, according to the "Swiss Banking Outlook".
Expectations regarding net new money inflows in cross-border business are cautious. Last but not least, there are concerns that other financial centers could overtake Switzerland as a wealth management location.
©Keystone/SDA
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