A crisis committee will meet this week to discuss the potential impact on Switzerland’s two biggest banks of the eurozone debt crisis, the NZZ am Sonntag newspaper reported on Sunday citing two unnamed sources.
The report said the committee, which was set up after the 2008 bailout of UBS, has got down to work for the first time amid growing concerns of a new financial crisis in the banking sector.
Interviewed by the NZZ, Patrick Raaflaub, director of financial markets regulator FINMA, described the situation in global markets as “tense” but declined to comment on the activities of the committee.
“A body like the financial crisis committee can by definition only function out of the public eye in such phases,” he said, refusing to explain specific measures.
The paper cited one source as saying that while UBS and Credit Suisse were relatively well capitalized, it was not clear how quickly this capital could be mobilized to relieve the impact of a serious crisis spreading through the system.
“In an international comparison, the two banks have an above average amount of capital. But they must further improve the quality of their equity capital,” he told NZZ am Sontag.
“It is no secret that we are encouraging these institutions [UBS and Credit Suisse] to reach their objectives faster than is mandatory,” Raaflaub said.
The committee was formed in 2008 at the request of the country’s parliament after Switzerland came to the rescue of UBS AG during the last financial markets crisis. It is led by Raaflaud and includes the vice chairman of the Swiss National Bank, Thomas Jordan, as well as several high level officials from the finance ministry.