Ex-bank supervisor wants capital requirements trebled

Daniel Zuberbühler, former head of the Swiss banking regulator, has called for an unweighted equity ratio of 10% for big banks and an adjustment to liquidity requirements. “The current equity regulation is ridiculously low,” Zuberbühler told SWI swissinfo’s Geldcast. He makes the case for banks to hold at least 10% unweighted, hard Tier 1 capital - almost three times more than today. Put simply, this means that a bank with a balance sheet total of CHF1.5 trillion ($1.7 trillion) now needs CHF150 billion put aside to absorb losses, compared to around CHF50 billion today. Zuberbühler is not alone in calling for banks to hold higher equity. Mattea Meyer, co-President of the Social Democratic Party has already advocated stricter equity regulations. This was after the Federal Council, together with the Swiss National Bank (SNB), the Financial Market Supervisory Authority (FINMA) and the two big banks, staged a partial state rescue of Credit Suisse bank within just a few days in March.