(Reuters) – Working out measures to prevent that the failure of a big bank can cripple Switzerland’s economy remains a challenge and new rules on capital ratios and banks’ liquidity are not enough, the Swiss National Bank’s head said.
“These preventive measures….are not a solution to the problem (of a too big to fail bank),” Philipp Hildebrand told a gathering of Swiss private bankers in Lausanne.
Hildebrand did not comment on monetary policy or the currency, pointing to the central bank’s policy meeting next Thursday.
Hildebrand noted that the total liabilities of Switzerland’s main banks, UBS and Credit Suisse, still represented four times Switzerland’s output, meaning the issue remains a problem that Switzerland needs to tackle.
Switzerland has introduced tougher requirements on capital and liquidity holdings as well as new rules on bankers’ pay.
However, a government commission on the too-big-to-fail issue made further far reaching proposals, which would require the large banks to change their structure so they could be broken up in the event of an insolvency.
(Reporting by Lisa Jucca and Robin Bleeker)