The Swiss government has taken steps to ensure the financial stability of the nation’s five systemically important banks (SIBs). On Thursday, the government announced a consultation to make a public liquidity backstop available to the SIBs, which includes UBS, Credit Suisse, Raiffeisen Group, Zuercher Kantonalbank and PostFinance.
The backstop was initially provided to Credit Suisse in March under emergency rules, and up to 100 billion Swiss francs was made available. The consultation will start on May 25 and last until June 21, and will seek input from banks, business associations and other affected institutions.
The government said the measures were necessary to improve the resilience of the banks due to their vital roles in taking domestic deposits, lending and carrying out payment transactions. It also noted that other regions such as the European Union, the United Kingdom and the U.S. have already created the conditions to provide liquidity support to systemically important banks in an emergency.
The consultation is part of a broader review of the regulatory framework announced after Credit Suisse’s takeover. The government is aiming to make the public liquidity backstop a permanent part of the regulatory framework, with draft legislation expected by mid-2023.