FRANKFURT, Germany — Switzerland’s main bank stated the federalgovernment and regulators must bring out an extensive evaluation of guidelines intended at avoiding devastating bank collapses, stating secret guardrails stoppedworking to avoid Credit Suisse from requiring to be saved by Swiss rival UBS.
The Swiss National Bank inspected numerous of the safeguards enforced in the wake of the 2008-2009 worldwide monetary crisis that were intended at avoiding a repeat.
The main bank concluded that anumberof “too huge to stopworking” guidelines created to prevent the collapse of a significant worldwide bank were insufficient and might even haveactually postponed action to ward off catastrophe.
“Looking forward, the experience with Credit Suisse reveals the requirement for a evaluation of the TBTF structure in order to assistin early intervention,” the main bank stated in its yearly monetary stability report released Thursday.
“It is now up to the authorities to bring out an thorough evaluation and draw lessons, likewise in view of the greater systemic value of the integrated bank and the associated dangers for Switzerland,” it stated.
Credit Suisse hadactually been one of 30 huge global banks singled out for harder analysis duetothefactthat of the possible effect of a failure on the international monetary system.
The Swiss lendinginstitution was required into a government-engineered takeover with UBS after Credit Suisse’s stock plunged and consumers rapidly pulled out their cash in March. Authorities feared its collapse might evenmore roil worldwide monetary markets after the failure of 2 U.S. banks.
The quickly setup maritalrelationship, which closed last week, hasactually raised concerns about the dangers of producing an even larger bank. Both