New financial rules to cost banks €50 billion

Tough new financial regulations will impose a greater burden on German banks than thought, forcing them to put aside an extra €50 billion in capital in coming years, a central banker has said.

New financial rules to cost banks €50 billion
Photo: DPA

Under the so-called “Basel III” financial system regulations, banks will have to raise the capital to protect themselves against unforeseen future crises, Bundesbank board member Andreas Dombret told Manager Magazin in an interview published Thursday.

It is the first time there is a concrete total as to how much the tougher regulations will cost. Under Basel III, banks have to come up with larger capital buffers to protect themselves against financial emergencies. In particular, there will be tougher rules about what actually constitutes capital resources.

Leaders signed off on the new regulations at the G20 summit in Seoul last week.

The new multi-billion euro calculation arises from simulations of what would happen in a crisis, which are to be published in the Bundesbank’s financial stability report on November 25.

One part of the additional capital could probably be raised through profits, Dombret said.

“But external capital measures will be called for,” he added.

Dombret also warned against premature assumptions the financial crisis was over.

“We are in the fourth year of the crisis. There is no reason to sound the all-clear.”

The difficult budget situation of many industrial nations represented a serious challenge for the stability of the financial system. Furthermore, the interbank market was still not working fully, he said. Many banks were still dependant on the central bank for liquidity.

Lower interest rates in the euro zone at the same time carried new risks for financial stability, he said.

“We have to watch very closely where new bubbles develop and what the risks are,” he said.

The Local/dw

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Cashless payments in Switzerland: What is Twint and how does it work?

If you live in Switzerland, you are likely no stranger to Twint and maybe even use it regularly to make and receive payments. But if you are not familiar with this app, this is what you should know.

Twint app can be installed on a mobile phone.
“Twinting” money with a smartphone is easy and convenient. Photo by Andrea Piacquadio from Pexels

In Switzerland, the word “Twint” is used both as a noun and a verb.

As a noun, it describes the mobile application which allows you to pay for various goods and services practically everywhere in the country.

As a verb, (“to twint”), it means to send someone money, or receive it, via the same app.

So what exactly is Twint?

Simply put, it is digital cash (not to be confused with bitcoin, which is digital currency) that was first introduced in Switzerland in 2014 and has become very popular since then.

Twint logo. Image by

People like it because it is an easy and quick way to make instantaneous payments, especially in situations when credit cards or physical cash can’t be used.

A big part of its convenience is that it can be used at cash registers, vending machines and parking meters, as well as in online shops — pretty much everywhere in Switzerland, even in places that don’t accept credit cards.

The only similar mode of payment would be your maestro debit card issued by your bank.

This video explains exactly how the process works.

Another advantage of Twint is that you can use it to send money to someone else’s mobile phone — as long as they also have Twint. And you can receive money the same way.

And there are no fees or charges for this service.

How does Twint work?

Anyone can use Twint, but you need a Swiss bank account or a credit card and, of course, a smartphone.

According to Twint website, you need a smartphone with either an iOS (from version 12.2 and upwards) or Android (from version 7 and upwards) operating system and Bluetooth capability (from version 4.0 and upwards).

“It is generally not possible for Twint to be used on Apple devices with an operating system older than “iOS 12.2” or on Android devices with an operating system older than “Android 7”. On Android devices without access to the Google Play Store (e.g. on certain HUAWEI models), the use of Twint app is also not possible”.

But If you have a compatible phone, installing Twint is easy.

Swiss banks offer their own version of the app, and you can download it directly from your bank’s website.

Then, when you use Twint to make a payment, the amount is debited directly from your bank account or credit card.

By the same token, if you receive payment from another Twint user, the money is automatically deposited in your account.

And you are not limited to just one Twint app.

If you have accounts is several banks, or have more than one credit card, you can install and use all of them.

READ MORE: How to open a bank account in Switzerland

Can Twint be used to make payments and receive money from abroad?

For the moment, Twint can be used solely in Switzerland and payments can be made only in Swiss francs – although this may change in future. 

“We are, however, working closely with providers in other countries to develop an international and multi-currency solution”, according to Twint website.

You can find more information about Twint here.

READ MORE: Which bank is best for Americans in Switzerland?