By Andrew Morse
ZURICH--Switzerland will draft measures outlining "more
stringent capital requirements" for UBS AG (UBSN.EB) and Credit
Suisse (CS), as the government seeks to ensure the country's banks
don't become too big to fail, the Swiss government said on
Wednesday.
In a statement, the Federal Council, the country's cabinet, said
it had asked the finance department to draft amendments to existing
bank law that create tougher capital measures by the end of the
year. The cabinet didn't specify what the capital requirements
would be.
Like other countries that bailed out big banks during the
financial crisis, Switzerland wants to prevent any financial
institution from becoming "too big to fail." Switzerland rescued
UBS, the country's biggest bank, in 2008 after the U.S. mortgage
meltdown resulted in roughly $50 billion in losses. At one point,
the government owned about 9% of the Zurich-based bank.
"Additional measures and adjustments are required to boost the
resilience of systemically important banks further and to make
their restructuring or orderly resolution possible without
taxpayers incurring any costs," the cabinet said in its statement.
"One of the recommendations is thus to increase the capital
requirements."
The amendments are to be made in consultation with the Swiss
Financial Market Supervisory Authority, the market regulator
commonly known as Finma, and the Swiss National Bank. The banks
will also be consulted.
Write to Andrew Morse at andrew.morse@wsj.com
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