Switzerland's central bank and financial regulator on Wednesday issued tighter liquidity rules for UBS AG and Credit Suisse Group, part of a raft of measures aimed at companies deemed "systemically important" to the Swiss economy.
The main element of the new rules is a "stringent" stress scenario that covers a general financial market crisis as well as creditors' loss of trust in a bank. Both Zurich banks will be required to comply with the new liquidity rules as of June 30.
"A modern liquidity regime is central to the robustness, and in turn to the stability, of the financial system," the Swiss National Bank and the country's Financial Market Supervisory Authority said in a statement.
Specifically, UBS and Credit Suisse will have to show that they hold what the SNB and Finma consider to be first-class liquid assets to cover outflow estimates in a stress scenario for at least 30 days.
In a statement, UBS said it already meets the new requirements.
Credit Suisse said it "entered the credit and financial market dislocation with a strong liquidity position, which it has maintained and strengthened through open market funding ever since …
"This has positioned Credit Suisse well to meet the new rules for quantitative and qualitative liquidity management … when they become effective at the end of the second quarter of 2010."
Existing liquidity rules are from 1988 and cannot ensure high enough resistance to crises, the SNB and Finma said.
Switzerland has also worked toward tightening capital requirements for its two largest banks, which present a concentration risk for the country.
This was underscored by a government-led financial-aid package for UBS in October 2008, which ultimately led the SNB to examine "too-big-to-fail" Swiss banks.