After the CS crash: Commission on State Liquidity Protection for Major Banks

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The Committee for Economic Affairs and Taxes of the Council of States (WAK-S) has therefore suspended the consultations and is waiting for an analysis report from the Federal Council, the parliamentary services announced on Friday. The WAK-S was therefore unable to definitively clarify fundamental questions regarding the transfer of the so-called Public Liquidity Backstop (PLB) under common law.

It is important to clarify under what conditions a bank is systemically important, to what extent public liquidity protection affects the competitive situation, whether the aid should function as a restructuring or liquidity instrument and at what point the banks have to pay for it.

Implement monitoring tools and sanctions as quickly as possible

According to the WAK-S, these questions also overlap with the planned revision of the too-big-to-fail legislation. It makes sense to wait for the analysis report announced for spring 2024 for an assessment in the general context. The PLB was used in the rescue and takeover of the major bank CS by UBS, but only through emergency law.

A narrow majority of the Commission also wants to no longer evaluate three internationally used monitoring and sanctions tools, but to put them forward and introduce them as quickly as possible.

This concerns the so-called senior manager regime, which allows the allocation of responsibilities, a power to impose fines for the supervisor of the financial markets (Finma) and the publication of the stress tests of systemically important banks. To this end, the WAK-S has submitted a committee motion with the casting vote of President Alex Kuprecht (SVP/SZ). (SDA)

Source:Blick