SNB urges UBS, Credit Suisse to improve capital, leverage ratios
ZURICH Dec 12 (Reuters) - The Swiss National Bank on Thursday urged UBS and Credit Suisse to improve their capital and leverage ratios, which it said would be a key focus in the event of a crisis.
"It is vital for the big banks to continue improving their capitalization, particularly as regards to the leverage ratio," SNB Vice Chairman Jean-Pierre Danthine said on Thursday at the central bank's quarterly monetary policy assessment.
Last month, Switzerland's finance minister shocked the country's two largest banks by saying Swiss banks should be subject to a leverage ratio of between 6 and 10 percent, against the 3 percent for global banks under rules that come into force in 2018.
Danthine didn't comment on those remarks or disclose any specific targets for the big banks' leverage ratios, over which there is debate about how to measure.
"In an international comparison based on a number of commonly used definitions, they are still below the average of large global banks," Danthine said.
UBS and Credit Suisse, Switzerland's two biggest banks, form the backbone of a financial services industry accounting for 6 percent of the economy. The Swiss regulator already requires the country's banks to hold more than the global standard in equity by 2019.
Bankers have warned privately that if Switzerland's biggest banks had to meet a higher leverage ratio, they could be forced to scale back their activities in important markets like bond trading, putting them at a competitive disadvantage.
At Credit Suisse, fixed income and bond trading made for 29 percent of total revenue last year, compared with 22 percent before the financial crisis of 2008-09.
By contrast, UBS said a year ago it planned to cut 10,000 investment bank staff by withdrawing from large parts of the fixed income market and would focus almost exclusively on private banking. (Editing by David Holmes)
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