Search Mark
Home / Industry Dynamics

Swiss Finance Minister Flags Risks in Winding up Global Banks

Today’s News

Swiss Finance Minister Karin Keller-Sutter has raised concerns about the legal complexities involved in winding up global banks 

Swiss Finance Minister Karin Keller-Sutter highlighted the importance of addressing legal risks when winding up global banks. 

Image Source: Bloomberg
Swiss Finance Minister Karin Keller-Sutter highlighted the importance of addressing legal risks when winding up global banks. 
Image Source: Bloomberg 

In an interview with the Frankfurter Allgemeine Zeitung, she discussed the need for international standardization of rules for banks considered “too big to fail” to ensure they can be systematically dismantled if necessary.  

Keller-Sutter is actively engaging with the Financial Stability Board and finance ministers from various countries, including Germany’s Christian Lindner, to address these issues. 

“I’d like to raise awareness that winding up (a bank) may sometimes not be possible due to international legal risks. In the case of Credit Suisse, that was clearly a risk,” Keller-Sutter stated. She expressed skepticism about the effectiveness of compulsory creditor participation in recapitalization, commonly known as a “bail-in,” particularly in relation to major U.S. banks. 

“The equity backing of the foreign subsidiary must be so large that it can be sold or liquidated in a crisis without damaging the Swiss parent company. That was exactly the problem with Credit Suisse,” she explained.  

The collapse of Credit Suisse significantly impacted financial markets and led to its acquisition by UBS, prompting the Swiss government to implement new measures for managing too-big-to-fail banks. Recently, UBS has seen an improvement in its financial outlook, with S&P revising its rating to stable from negative. 

Other News

Italy’s Asset Sales Struggle to Reduce Debt 

Italy’s strategy to sell state assets, including stakes in Poste Italiane and Ferrovie dello Stato to reduce its public debt may fall short of its USD 22 billion goal due to political and regulatory challenges. 

FCA Revises Controversial Naming Strategy 

The U.K.’s Financial Conduct Authority is scaling back its plan to name companies under investigation after facing strong opposition, concerned about the potential negative impact on London’s financial sector. 

Court Overturns SEC Fund Disclosure Rules 

A federal court nullified SEC rules requiring enhanced disclosure from private equity and hedge funds, ruling the SEC exceeded its authority, which could significantly affect future regulatory actions. 

Share to

Industry Dynamics

Weekly Economic Calendar for June 24th to 28th, 2024

Weekly Economic Calendar for June 24th to 28th 2024

2024-6-21 | Industry Dynamics

Australian Mexican Restaurant's Shares Soar 36% on IPO Debut

Shares of the Australian Mexican restaurant chain, Guzman Y Gomez (GYG.AX), soared by more than one-third on their trading debut, marking the country's largest IPO in a year.  

2024-6-20 | Industry Dynamics

Federal Reserve Treads Carefully Towards Potential Rate Cuts 

Federal Reserve officials are cautiously optimistic about potential interest rate cuts later this year, seeking further signs that inflation is subsiding without negatively impacting a robust labor market.

2024-6-19 | Industry Dynamics