SNB boss Jordan on CS: “CS’ stock market value was much lower than book value”

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According to Jordan, the Credit Suisse (CS) case showed that the market’s assessment of capitalization differed significantly from regulatory capital. “CS’ stock market value was much lower than its book value,” Jordan said in an interview published Sunday.

The “too big to fail” regulation must also take into account the speed of cash outflows. In the future, not all bank deposits should be withdrawn almost simultaneously. “In the future, a significant portion of deposits in banks should be provided with notice periods or kept for a fixed date,” Jordan said.

Banks will also need to better prepare for exits by keeping more assets on their balance sheets. If necessary, they can deposit it with the Central Bank as collateral to receive liquidity support.

The head of the SNB said that the SNB cannot secure a bank’s deposits. Liquidity in return for collateral, but it already gives. However, liquidity support alone cannot restore confidence. The head of the SNB said the reason for CS’ closure was “just a loss of confidence in the bank”.

(SDA)

Source :Blick