🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 1-SNB says intl. rules create level playing field

Published 09/11/2009, 10:54 AM
Updated 09/11/2009, 10:57 AM
UBSN
-

* Says int. rules create level playing field for Swiss banks

* Says have to find ways to unwind big banks in crisis

* Says financial system stabilised, crisis not over yet

* Does not comment on monetary policy, currency

(Adds details, background)

By Sven Egenter

CHUR, Switzerland, Sept 11 (Reuters) - New international rules should dampen concern that tighter Swiss regulation puts the country's large banks at a disadvantage, SNB Vice-Chairman Philipp Hildebrand said on Friday.

In the speech at a regional economic forum in the Swiss town of Chur, focusing on the historical development of the Swiss National Bank's role as a guarantor of financial stability, Hildebrand made no mention of current monetary policy, the Swiss currency or economic developments.

"If you look at the statement from the Basel Committee (on banking supervision) you will see that we managed from a Swiss perspective to avoid the level playing field problem," Hildebrand said.

"The international direction for the future architecture of the financial system is highly compatible what we have done over the last year," he said.

The Basel Committee published on Sunday its proposals for tighter banking regulation, including tougher rules on banks' capital, liquidity or remuneration.

The SNB has led the push for tougher rules for banks in Switzerland, starting to introduce higher capital requirements as early as spring 2008, as the near-collapse of the largest bank UBS triggered fears of an Iceland-style meltdown.

The big Swiss banks have warned against too much regulation, saying this may put them at a disadvantage compared to other international banks.

The SNB vice-chairman, who will take over as chairman at the beginning of next year, repeated his call for rules to unwind large banks in a crisis to deal with the too-big-to-fail problem.

"We have to focus on finding a way to orderly liquidate a large bank in a crisis," he said, adding that this complex problem had to be addressed on an international level.

"Limiting the size of a bank is the last resort if we do not manage to find a solution together with the banks," Hildebrand said.

Hildebrand made the comments as two leading Swiss politicians and a top businessman made a joint call for the SNB to develop a strategy to deal with the risk the size of the big banks pose for the broader Swiss economy.

Christoph Blocher of the right-wing Swiss People's Party (SVP) made a rare joint appeal for action with Christian Levrat, leader of the centre-left Social Democrats and Nicolas Hayek, chairman of Swiss watchmaker Swatch .

Hildebrand said he would not comment on monetary policy as the bank's policy setting meeting was less than a week away.

"We managed to stabilise the financial system for now and bring the banks back into calmer waters," Hildebrand said in the speech. "But the crisis is not fully over yet."

For a factbox on Basel Committee rules, click [ID:nL6453654]

For a factbox with the Swiss rules, click [ID:nLG717230]

(Reporting by Sven Egenter; Editing by Toby Chopra)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.