An employee checks a safe box in the vault of a Swiss bank in Basel January 21, 2009. Picture taken January 21, 2009. REUTERS/Arnd Wiegmann ZURICH (Reuters) - Switzerland’s government on Wednesday settled on the final version of new too-big-to-fail (TBTF) bank rules, designed to protect the Swiss economy from the collapse of a major bank. Solving the TBTF problem has been a priority for U.S. and European regulators after several banks, including UBS (UBSG.S), were bailed out by taxpayers during the financial crisis. The final law approved by the Swiss government includes the headline requirement from October’s draft TBTF rules for a 5 percent leverage ratio of core capital to total assets for Switzerland’s two biggest banks, UBS and Credit Suisse (CSGN.S). “With the new provisions, Switzerland will be one of the countries with the highest capital requirements in the world for global systemically important banks and will meet the capital standard for such banks as approved by the G20 countries,” the government said in a statement. “The amendments will enter into force on 1 July 2016.” In a concession to the big banks, however, the government rolled back a proposal to constrain balance sheets if they grow beyond a certain size. Reporting by Joshua Franklin; Editing by Greg Mahlich
The Swiss government has settled on a final version of new too-big-to-fail bank rules, which have been created to protect the Swiss economy from a collapse of a major bank. Under the proposals, banks would be required to hold more capital against their assets and pay higher fees for doing so. In a concession however, the Swiss government have rolled back a proposal to constrain balance sheets if they grow beyond a certain size. The new rules are to take effect from 1st July this year.