Swiss to tighten up on bank capital

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Swiss to tighten up on bank capital

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A Swiss government commission has said the country’s biggest banks – UBS and Credit Suisse – should keep reserves well in excess of new international standards.

The proposal is for them to hold capital equivalent to 19 percent of their assets.

Those rules now has to be approved by the Swiss government and parliament.

Such measures would limit the two banks’ ability to compete in investment banking.

Swiss regulators would prefer the banks to focus more on less risky private banking.

The commission of top regulators, bank executives and other industry representatives said in their report that a mixture of measures was needed to reduce the risk of having banks with a “too big to fail” problem.

The two banks’ total assets are four times the size of Switzerland’s economy.

Switzerland has led the push for tighter banking regulations after the government had to bail out UBS at the height of the global financial crisis.