Swiss watchdog wants UBS, Credit Suisse to set aside more capital: reports
Swiss banks UBS and Credit Suisse need to set aside 70 billion Swiss francs (43.5 billion euros, 68.3 billion dollars) more in capital as Switzerland's banking watchdog moves to prevent a repeat of the subprime crisis.
By Agencies |
GENEVA: Swiss banks UBS and Credit Suisse need to set aside 70 billion Swiss francs (43.5 billion euros, 68.3 billion dollars) more in capital as Switzerland's banking watchdog moves to prevent a repeat of the subprime crisis.
Parliamentarian Hans Kaufmann said that the Federal Banking Commission would require additional provisions of "40 billion francs for UBS and billion francs for Credit Suisse".
Banking commission spokesman Alain Bichsel confirmed that a sum had been proposed and that the banks had until to the end of summer to put forward their positions.
"We would issue the definitive provision in autumn," he said.
Both banks have been hard-hit by the US subprime mortgage crisis, with UBS writing down over 37 billion dollars in assets and Credit Suisse writing down around 10 billion Swiss francs since the onset of the crisis.
The banking commission and the Swiss central bank have earlier said that one of the safeguards that should be put in place to prevent such a repeat would be a higher capital base.
Philipp Hildebrand, who is vice-chairman of the Swiss central bank's governing board said last month that a higher capital requirement was needed.
He also suggested the introduction of a a so-called leverage ratio which is also a limit on leverage to stop banks from over-leveraging their assets.
Meanwhile, a Swiss newspaper said on Sunday that the commission had sent its proposal of new regulations to the banks last week.
But Credit Suisse has already warned against these new measures. The bank's spokesman Alex Biscaro said that "measures must be targetted at the actual problems, and from our point of view, the leverage ratio and capital buffers are not the case."
He added that these "one-sided" measures could endanger the competitiveness of Swiss banks and the Swiss financial centre.
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