ZURICH Parliamentarians from Switzerland's right-wing Swiss People's Party (SVP) are mounting a new effort to split up UBS UBSN.VX and Credit Suisse (CSGN.VX) by teaming with left-wing lawmakers.
Lower-house lawmakers on Monday submitted three motions aimed at separating investment banking activities from so-called systemically relevant activities, even after Switzerland put stiffer regulation into force last year for the country's two largest banks.
"A bank should only as big that it can be allowed to fail in an emergency, without the state intervening," SVP lawmaker Caspar Baader said in parliament.
"We need smaller banks as a result, and thus more of them."
UBS, which recently cut the last tie to the Swiss government over its 2008 rescue, and Credit Suisse, which raised capital the same year without state aid, form the backbone of a financial industry that generates 6 percent of Switzerland's gross domestic product.
SVP lawmakers had already paired with the left-wing Social Democrats (SP) in 2009 over splitting up UBS and Credit Suisse, but those efforts failed after differing political aims emerged when the two began hammering out details.
This time, the SVP offered few specifics, asking the government, which said it would oppose the motion, for suggestions instead.
The stiffer rules have already led both banks to act. Credit Suisse has pruned risky assets and slashed investment banking activities which soak up substantial capital.
UBS has gone further. In October, the bank said it would fire 10,000 staff and largely wind down its fixed income business in favor of returning to its private banking roots.
Authorities have been grappling since the collapse of U.S. investment bank Lehman Brothers five years ago with the question of how banks regarded as systemically important, or too big to fail (TBTF), can be recapitalized without causing panic or needing taxpayer cash.
The Swiss regulator said last month that Switzerland shouldn't bail out its largest banks again before asking creditors and shareholders to stump up.
(Reporting By Katharina Bart)