A Swiss parliamentary committee backed a permanent public liquidity backstop for systemically important banks on 13 October. The upper-house Economic Affairs and Taxation Committee also supported charging banks an upfront fee for access. Under its proposed eligibility test, UBS would currently be the only lender required to pay.
The committee voted 7–5 for limiting the fee to systemically important banks with substantial international operations. Switzerland's other systemically important lenders are Raiffeisen, PostFinance and Zürcher Kantonalbank. The committee's proposal is not yet law and remains subject to the parliamentary process.
FEE BASE WOULD BE BROADENED
The committee proposed broadening the fee calculation to include bail-in debt and collateral placed with foreign central banks. Other long-term funding sources, including covered bonds and Pfandbrief notes, would also enter the calculation. Reuters reported that UBS declined to comment on the decision.
The Swiss Bankers Association opposed the upfront charge, arguing that it would operate as a special tax on UBS. The committee's majority said overseas activities carry materially greater risks than domestic business. Its narrower eligibility test would distinguish UBS from the other three banks covered by the country's systemic-bank framework.
CREDIT SUISSE CRISIS SHAPED THE PROPOSAL
The Federal Council proposed putting the backstop into ordinary law in September 2023. An emergency version had been used during the state-supported takeover of Credit Suisse by UBS earlier that year. The mechanism is designed for a crisis in which a systemically important bank cannot obtain enough emergency liquidity from the Swiss National Bank against available collateral.
The next milestone is consideration by the Council of States and the wider parliamentary process. Lawmakers will have to decide whether UBS alone should pay the upfront fee and which funding instruments should determine its size. Until those votes are completed, the committee's decision remains a legislative proposal rather than a binding charge.