Fritz Zurbrügg: Presentation of the Swiss National Bank's Financial Stability Report

Introductory remarks by Mr Fritz Zurbrügg, Vice Chairman of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 15 June 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

In my remarks today, I will present the key findings from this year's Financial Stability Report, published by the Swiss National Bank this morning. In the first part of my speech, I will look at the situation of the big banks, focusing on the progress made in implementing the revised 'too big to fail' regulations (TBTF2) that came into effect almost a year ago. In the second part of my remarks, I will outline our current assessment of the situation at domestically focused banks.

Big banks

Let me start then with the big banks and the TBTF2 regulations. The revised regulations are designed to resolve the 'too big to fail' issue in Switzerland, so that systemically important banks no longer have to be bailed out with taxpayers' money in the event of a crisis.

The TBTF2 regulations rest on two complementary pillars. First, they are aimed at strengthening the resilience of systemically important banks in a going-concern perspective. They therefore specify higher requirements for going-concern capital in particular, thereby reducing the likelihood of a systemically important bank getting into financial distress. Second, if a systemically important bank nevertheless gets into financial distress - this is called the gone-concern perspective - the regulations provide a framework for orderly resolution, ensuring the continuation of systemically important functions without the use of public funds. To this end, the regulations stipulate requirements both for loss-absorbing capacity in a gone-concern perspective and for resolution planning.