Tag Archives: CapLaw-2012-2

Proposed New Capital Adequacy Rules Remodel Swiss Regulatory Capital Framework

The Federal Department of Finance recently published different proposals with respect to new rules on capital adequacy for Swiss banks, including detailed provisions aimed at mitigating the too-big-to-fail conundrum. The suggested changes strive to raise both the quality and quantity of the regulatory capital base and enhance the risk coverage of the capital framework. Whereas overall the proposed changes are welcomed insofar as they are aimed at implementing the new capital adequacy rules of the international Basel III framework, some amendments are criticizable as they would result in stricter requirements for Swiss banks than required under Basel III for no apparent good cause. In addition, the stricter capital adequacy rules for systemically important banks seem to depart from the final report of the expert commission with respect to a number of important points and, if implemented, may put significant constraints on Switzerland’s two large banks.