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Credit Suisse collapse showed weakness in regulatory framework: SNB
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ZURICH (Reuters) – The collapse of Swiss bank Credit Suisse last year has highlighted weaknesses in the regulatory framework, the Swiss National Bank said on Thursday.
ZURICH (Reuters) – The collapse of Swiss bank Credit Suisse last year has highlighted weaknesses in the regulatory framework, the Swiss National Bank said on Thursday.
“The SNB shares the Federal Council’s view concerning need for action in the areas of capital requirements, liquidity requirements, early intervention, and recovery and resolution planning,” the central bank said in its annual financial stability report.
(Reporting by Miranda Murray and Ludwig Burger; Writing by Dave Graham)
A regulatory framework refers to the set of rules, regulations, and guidelines that govern the operations of financial institutions and ensure their stability and compliance with laws.
Capital requirements are regulations that determine the minimum amount of capital a bank must hold to ensure its solvency and protect depositors, typically expressed as a percentage of risk-weighted assets.
Liquidity refers to the ability of a financial institution to meet its short-term obligations without incurring significant losses, often measured by the availability of cash or easily convertible assets.
Financial stability is a condition where the financial system operates effectively, maintaining confidence among investors and preventing systemic risks that could lead to economic crises.
Recovery and resolution planning involves strategies and processes that financial institutions must develop to recover from financial distress or failure, ensuring minimal impact on the economy.
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