18 Jun 2015
SNB urges big lenders to improve leverage ratios - FSR
FXStreet (Mumbai) - The Swiss banking sector has improved over the last 12 months, but substantial risks remain, so the big banks in particular must not lose momentum in their efforts to improve their resilience, the Swiss National Bank (SNB) said in its latest Financial Stability report (FSR).
The Swiss National Bank has urged the country's biggest lenders, UBS and Credit Suisse, to improve their leverage ratios in order to better withstand a potential financial crisis.
The central bank said that in Switzerland, financial conditions were relatively favorable in 2014, but have become more challenging due to the strong appreciation of the Swiss franc that followed the discontinuation of the minimum exchange rate in January 2015.
The report also noted that the strength of the Swiss franc reduces economic growth in Switzerland. The negative impact is being felt among the country's exporters.
The Financial Stability Report noted, "While the Swiss big banks' risk-weighted capital ratios are above the average for large globally active banks, the same cannot yet be said for their leverage ratios,"
"The SNB still considers it necessary that the big banks increase transparency with regard to risk-weighted assets (RWA)," adding that "risk-weighted capital requirements (including a floor for model-based RWA) and leverage ratio requirements should complement each other."
The Swiss National Bank has urged the country's biggest lenders, UBS and Credit Suisse, to improve their leverage ratios in order to better withstand a potential financial crisis.
The central bank said that in Switzerland, financial conditions were relatively favorable in 2014, but have become more challenging due to the strong appreciation of the Swiss franc that followed the discontinuation of the minimum exchange rate in January 2015.
The report also noted that the strength of the Swiss franc reduces economic growth in Switzerland. The negative impact is being felt among the country's exporters.
The Financial Stability Report noted, "While the Swiss big banks' risk-weighted capital ratios are above the average for large globally active banks, the same cannot yet be said for their leverage ratios,"
"The SNB still considers it necessary that the big banks increase transparency with regard to risk-weighted assets (RWA)," adding that "risk-weighted capital requirements (including a floor for model-based RWA) and leverage ratio requirements should complement each other."