Swiss call for Credit Suisse, UBS to reduce size

15th September 2009, Comments 0 comments

Banking giants UBS and Credit Suisse asked to reduce their size by Swiss industrialists and politicians.

Bern – Swiss industrialists and politicians from the Socialist and right wing parties formed a rare alliance Friday to call for the country's two banking giants UBS and Credit Suisse to reduce their size.

"If the two big banks were to collapse, Switzerland would be in immeasurable difficulties," said signatories of a declaration that warned against the size of the two banks.

The declaration was signed by the Socialist Party, the Swiss right wing party SVP, Swatch group chairman Nicolas Hayek and the Federation of the Swiss Watch Industry.

It also called for the Swiss National Bank and the Swiss financial markets watchdog Finma to "develop a strategy to regulate, once and for all, the question of too big to fail."

The authorities should make "regulations and demands on the capital of the big banks more stringent, in order to force them to reduce their oversized balance sheets," it said.

Christoph Blocher, vice chairman of SVP, noted that Credit Suisse and UBS are "too big" because the sum of their balance sheets made up "almost seven times the gross domestic product of Switzerland" before the crisis.

Amid the crisis, the Swiss government had to bail out UBS by taking a temporary stake in the bank. While Credit Suisse did not require state aid, it sought fresh funds from private investors.

"If these measures are not taken, we will be in a similar situation in four or five years' time," warned Christian Levrat, chairman of the Socialist Party.

AFP / Expatica

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