ZURICH, March 4 (Reuters) - Big Swiss banks should hold capital above the new Basel III rules, the Swiss economy minister was quoted as saying on Friday, adding the tougher standards gave them a competitive edge.
After bailing out flagship bank UBS during the financial crisis, Switzerland is weighing rules that would force big banks to hold capital in excess of the Basel III banking regulations and allow them to be broken up in the event of a crisis, so as to prevent them from dragging down the whole economy.
Yet the measures, proposed by a committee of experts and set to be discussed in parliament later this year, have been criticised as being too tough compared to international standards.
"The too-big-to-fail (TBTF) problem needs to be solved," Economy Minister Johann Schneider-Ammann said in a pre-print of Saturday's edition of Finanz und Wirtschaft.
"For big banks I support the demand for relatively higher own capital, beyond the requirements of Basel III," he said. "Switzerland cannot afford to jump in as saviour again."
SNB Chairman Philipp Hildebrand has cautioned against watering down the proposed TBTF standards and has said they help Swiss banks stand out from foreign peers. The new rules would require UBS and Credit Suisse to hold Core Tier 1 capital adequacy ratio of at least 10 percent. The plan has yet to be voted on by parliament.
STRONG FRANC
The Swiss franc has been a destination for investors worried by the euro zone's debt crisis, driving the franc to record highs against the dollar and euro and prompting complaints from exporters like watchmaker Swatch Group.
But so far the Swiss economy has shown few ill effects from the strong franc.
Debts in the euro zone were worrying and had caused the euro to slide, pressuring margins in the export sector, Schneider-Ammann said.
"Nevertheless, I don't advocate interventionism," he said.
The Swiss government has announced measures to help firms to deal with the strong Swiss franc, including increased funding for the tourism industry and support for companies to boost innovation. (Reporting by Catherine Bosley; Editing by Will Waterman)