The economic affairs committee of the Swiss Council of States has clearly backed putting state liquidity support for systemically important banks into law, according to parliament's announcement. The committee approved the bill overall by 9 votes to 0 with 3 abstentions.
By 7 votes to 5, the committee wants the lump-sum upfront fee limited to systemically important banks with substantial foreign business. As things stand, only UBS would meet that criterion and so pay the fee. The committee justifies the restriction by saying foreign business carries materially more risk than domestic business.
The committee approved the modified upfront fee by 8 votes to 4. By 6 to 5 with 1 abstention, it also wants a maximum assessment rate of one basis point written into the law rather than left to the ordinance. On other points it agrees with the Federal Council's draft. A minority opposes any lump-sum fee because the banks have no legal entitlement to state liquidity support.
The Swiss Bankers Association supports the public liquidity backstop (PLB) but firmly rejects what it calls a new special tax on UBS, according to watson.ch. UBS declined to comment on the decision, Reuters reported, as cited by The Global Banker. The Council of States is expected to debate and decide these questions in the winter session.
Both chambers had suspended deliberation on bill 23.062 to assess the PLB within the wider too-big-to-fail regulation. The PLB was introduced in 2023 by emergency law because of the Credit Suisse crisis. Switzerland's other systemically important banks besides UBS are Raiffeisen, PostFinance and Zürcher Kantonalbank.
Related: Swiss committee backed UBS fee for permanent public liquidity backstop
Sources: parlament.ch, theglobalbanker.com, watson.ch