"Swiss Finish" Would Be Spread Positive For Swiss Banks: News In Coming Days (BBG)

Swiss looking to rework banking rules, announcement in coming days, acc to BBG. Big moves to reintroduce any “Swiss finish” would be credit positive, in our view, specifically for UBS, BAER, BCV and the other cantonal banks.

• Rules have been worked on for some months now, following the Credit Suisse rescue in Mar-23 and closer scrutiny of UBS, whose balance sheet is now double Swiss GDP, is an obvious outcome to expect.
• Finma, the much-criticised Swiss regulator is likely to gain greater legal powers, including bringing in a “senior manager regime” (which the UK, for example, already has) and greater control over bonus payments within banks.
• From a credit perspective, we are already seeing greater capitalisation and liquidity buffers enacted at UBS but it would appear the “Swiss finish” is likely to return – an extra buffer imposed by the Swiss on top of global regulations. This would likely be very politically contentious, especially as high interest rates have bolstered Swiss bank profitability more recently. If enacted, it would likely be a credit positive.