The ongoingtalks, which have not been previously reported and are part of a broader review of the country’s banking rules, are intended for the top Swiss banks and could target mainly their wealth clients, two sources said.
Among the measures being discussed is the option to stagger a greater portion of withdrawals over longer periods of time, one of the sources said. Imposing fees on exits is also an alternative being discussed, two of the sources said.
Rewarding clients who tie up their savings for longer with higher interest rates is being debated, one of the sources said.
How do you start a bank run?
Tell everyone to get your money out before we put in rules where you no longer get your money out.
I imagine a lot of money in Swiss banks can’t really go anywhere else safely.
I imagine if that those accounts were big enough, Credit Suisse would still be in business.
Banks must guard against faster bank runs, a senior Bank of England official says
Challenges facing central banks included “how to ensure that banks’ liquidity insurance remains appropriate as technological change increases the risk of larger and faster deposit runs, of the kind seen this spring in the U.S.,” the BoE’s executive director for markets, Andrew Hauser, said.
Central banks also needed to judge where their balance sheets should settle after expanding hugely since over 15 years of emergency bond-buying.
A third challenge was how to ensure the stability of the financial system as a whole - including non-bank market finance such as hedge funds - in the face of increasingly frequency systemic liquidity shocks.
This is the best summary I could come up with:
LONDON/ZURICH, Nov 3 (Reuters) - Swiss authorities and lenders, including UBS (UBSG.S), are discussing new measures to prevent bank runs after Credit Suisse’s rescue earlier this year, four sources familiar with the matter said, a move that could affect billions in deposits.
Earlier this year, some regional U.S. banks and Credit Suisse suffered massive deposit runs, causing some to fail and regulators to intervene to prevent a broader financial crisis.
In the case of Credit Suisse, the Swiss lender suffered unprecedented outflows and came close to a disorderly wind-down in March.
Wealth managers tend to have a greater concentration of deposits than some of the retail banking competitors, which emerged as a weakness for the lender.
Its near-implosion prompted the SNB to step in with emergency funding and to facilitate its takeover by UBS, making the country’s biggest bank even larger.
“The case of Credit Suisse has clearly shown that outflows of customer deposits can now be much faster and more extensive than assumed by the existing regulations,” said Swiss National Bank Chairman Thomas Jordan at an event in Bern on Wednesday.
The original article contains 676 words, the summary contains 182 words. Saved 73%. I’m a bot and I’m open source!