Finance
Swiss lawmakers want to push back public liquidity backstop
Published by Global Banking and Finance Review
Posted on February 25, 2025
2 min readLast updated: January 25, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on February 25, 2025
2 min readLast updated: January 25, 2026
Swiss lawmakers delay the permanent public liquidity backstop for banks, linking it to future capital requirements, potentially postponing it until after 2026.
ZURICH (Reuters) - Swiss lawmakers want to push back the introduction of a permanent public liquidity backstop (PLB) for big banks, linking the safety net to a forthcoming government proposal on capital requirements for lenders like UBS.
The unanimous decision by an upper house committee needs to be confirmed in parliament in its upcoming spring session and potentially delays the introduction of Switzerland's permanent PLB until after 2026.
A PLB provides cash to lenders in serious trouble, and in 2023 Credit Suisse accessed one via an emergency law before the bank collapsed and was bought by UBS.
The exact design of the permanent PLB can only be defined in the overall context of Switzerland's too-big-to-fail regulations, lawmakers found after consulting with the authors of a recent Bern University study and other academics.
While the committee "supports the PLB in principle," substantive discussions should be suspended until the Swiss government has clarified how it wants to regulate systemically important banks, it said in a press release on Tuesday.
In December, Swiss lawmakers called for stricter oversight of the financial sector after investigating the collapse of Credit Suisse and directed sweeping recommendations and requests at the government.
(Reporting by Ariane Luthi; Editing by Sharon Singleton)
A public liquidity backstop (PLB) provides cash to lenders in serious trouble, ensuring financial stability during crises.
Lawmakers are linking the PLB's introduction to a forthcoming government proposal on regulating systemically important banks, seeking clarity before proceeding.
In 2023, Credit Suisse accessed a public liquidity backstop via an emergency law before its collapse and subsequent acquisition by UBS.
The upper house committee unanimously decided to push back the introduction of the permanent PLB, pending further discussions on regulatory frameworks.
Following the investigation into Credit Suisse's collapse, Swiss lawmakers called for stricter oversight of the financial sector and directed recommendations to the government.
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