UBS, Credit Suisse boost compliance with standards

Thursday, 13. June 2019 08:33

The macroeconomic environment worsened "slightly" in the past year, mostly due to the slowdown in global growth and political uncertainty in the United States and Europe, affecting corporate credit quality on top of the continued impact of low interest rates, the Swiss National Bank said on Thursday. In its financial stability assessment before the quarterly interest rate decision, policymakers stressed UBS Group AG and Credit Suisse Group AG showed improvement in resilience and resolution, the crucial components of the tightened regulations for the so-called too big to fail (TBTF2).

The two biggest banks made slight progress in capital quality and they were near full compliance with the said rules, the document said, noting the premia on credit default swaps and ratings were unchanged from one year before. "Further efforts are required... to demonstrate that systemically important functions can be maintained without interruption in a crisis. In particular, this will involve reducing financial interdependencies within the group and closing liquidity gaps in the event of a crisis," SNB added, citing findings by FINMA, the local resolution authority.

Switzerland's central bank warned of historically high corporate debt levels.

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