The monetary and supervisory authority ensure that the entity meets the capital and solvency requirements that “guarantee its stability”
He Central Bank of Switzerland comes out in defense of Credit Suisse, after the second entity in the country has sunk on the stock market by 24.94% to a new all-time low. As requested by the bank itself, the monetary authority and also the Swiss Financial Market Supervisory Authority (FINMA) have assured at the end of this Wednesday in a joint communiqué that the “stringent capital and liquidity requirements applicable to Swiss financial institutions guarantee its stability“. In addition, the central bank has agreed to offer Credit Suisse liquidity “if necessary”a fundamental message aimed at reassure investors and customers and cut the deposit leakage that the entity has been suffering in recent months.
The two public bodies, thus, have wanted to differentiate the situation of the bank from the one that has caused the recent fall of Silicon Valley Bank in the United States: “The problems of certain banks in the US do not represent a direct risk of contagion for the Swiss financial markets”. They have also highlighted that Credit Suisse “meets the requirements of capital and liquidity imposed on banks “of systemic importance” (higher than those of smaller entities).
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“The rregulation in switzerland requires all banks to maintain capital reserves and liquidity that meet or exceed the minimum requirements of the Basel (international regulations) standards. In addition, systemically important banks must comply with higher requirements of capital and liquidity. This allows absorb negative effects of the great crises and disturbances”, they have defended.
FINMA has assured to be in “very close contact” with the bank and have “access to all the relevant information” for its supervision. In this context, the supervisory authority wanted to confirm that Credit Suisse “meets the highest capital and liquidity requirements” applicable to systemically important banks. In addition, the central bank has insisted that it will provide liquidity to the bank “if necessary”. “FINMA and the SNB are closely following the events and are in close contact with the Federal Department of Finance to ensure the financial stability“, the statement concludes.