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Sunday, Nov 3
Switzerland considers 2x-3x Basel III leverage ratio requirements
- Swiss banks, including UBS and Credit Suisse (CS), could face much higher leverage ratio requirements than those set out for implementation by the Basel III accord. Swiss Finance Minister Eveline Widmer-Schlumpf told journalists on Sunday, "We need to think about whether we need to further enhance the capital base."
- The Minister said that a ratio of 6%-10% was under discussion, or 2x-3x higher than the ratio required by Basel III by 2019.
- Switzerland has implemented tougher capital requirements than the rest of Europe. But central bank chief Thomas Jordan said back in Sept. that the "too-big-to-fail problem is not yet full solved." UBS was bailed out in 2008.
- A 6% leverage ratio would mean $21.9B in additional equity required at UBS and a $30.1B shore-up at Credit Suisse.