started · updated
Swiss commission supports Public Liquidity Backstop for major banks
The Swiss Council of States Economic Commission (WAK-S) has voted to support the legal anchoring of the Public Liquidity Backstop (PLB). This mechanism is designed to provide state liquidity assistance to systemically important banks during severe crises.
The PLB was previously introduced via emergency law in 2023 following the Credit Suisse crisis and is now being moved into permanent legislation. The WAK-S approved the proposal with a 9-0 vote and 3 abstentions.
While the commission supports the measure, there is ongoing debate regarding whether banks should pay a fee for this liquidity insurance. The majority of the commission supports a compensation fee but proposes limiting it to systemically important banks with substantial international business. Currently, UBS is the only bank that would meet this specific criterion. The commission justifies this limitation by noting that international business carries significantly higher risk than domestic operations.
Entities
Council of States Economic Commission · Swiss Federal Council · UBS
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 2 SOURCES] Under current conditions, only UBS would meet the criteria for the proposed fee based on foreign business volume. www.cash.ch
- [● 2 SOURCES] The commission supports a compensation fee, but suggests limiting it to systemically important banks with substantial foreign business. www.cash.ch
- [● 2 SOURCES] The WAK-S voted 9 to 0 with 3 abstentions to support the introduction of the Public Liquidity Backstop (PLB). www.cash.ch
- [● 2 SOURCES] The Federal Council aims to legally anchor the PLB to provide state liquidity assistance for systemically important banks. www.cash.ch