The case

Banking stability: Federal Council wants to close gaps in the too-big-to-fail regulation Link

Source: www.admin.ch and Aymo Brunetti, Professor of Economics at the University of Bern (SRF 1 today)

The commentary

Unfortunately, the 22 measures are still unbalanced, though it is crucial that a bank can be liquidated. “In the event of a crisis, the resolvability of a systemically important bank should be ensured as a credible option“. Three measures are important for this: a) strengthening equity capital (including that of (foreign) subsidiaries); b) state liquidity protection: “public liquidity backstop” and c) expanded FINMA’s instruments in the event of mismanagement (corporate governance) with the power to impose fines. In addition, these measures must be “tested”, i.e. there must be ongoing monitoring. 

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