Author Archives: Lee Saladino

Basel III Implementation in Switzerland: Leverage Ratio and Liquidity

As of 1 January 2018, further elements of the Basel III international regulatory framework for banks on capital and liquidity entered into effect in Switzerland. Notably, the unweighted capital adequacy requirement (leverage ratio) was extended from systemically relevant banks to all banks by requiring a minimum core capital (Tier 1 capital) to total exposure ratio of 3%. As of the same date, the liquidity coverage ratio (LCR) requirement were adjusted to provide for certain simplifications, which will primarily benefit smaller financial institutions. The risk diversification requirements of Basel III measured against Tier 1 capital will enter into effect in Switzerland in 2019. The introduction of the net stable funding ratio (NSFR), which was originally planned for 1 January 2018, has been postponed.

By René Bösch / Benjamin Leisinger / Lee Saladino (Reference: CapLaw-2018-03)

The Financial Stability Board published its Guiding Principles on iTLAC

On 6 July 2017, the Financial Stability Board published its guiding principles on the loss-absorbing resources to be committed to subsidiaries or sub-groups that are located in host jurisdictions and deemed material for the resolution of a G-SIB as a whole (iTLAC). The guiding principles support the implementation of the iTLAC requirement in each host jurisdiction and provide guidance on the size and composition of the iTLAC requirement, cooperation and coordination between home and host authorities and the trigger mechanism for iTLAC.

By René Bösch / Benjamin Leisinger / Lee Saladino (Reference: CapLaw-2017-45)

PRIIPs: Potential Impact on Plain Vanilla Bond Market

Most Swiss financial service providers have been aware of, and have been preparing for, the effect the new EU regulation on key information documents for packaged retail and insurance-based investment products or “PRIIPs” will have on the offering of structured products and other complex financial products. However, recent attention in connection with the medium term note program update season in Europe has been paid to potential effects that the regulation may have on the offering of plain vanilla bonds and the corporate bond market generally. This article discusses these potential effects, including those that may be of particular importance to the Swiss financial market.

By Lee Saladino / Andreas Josuran (Reference: CapLaw-2017-27)