Statement by the Swiss Bankers Association on the decision of the Council of States’ Committee for Economic Affairs and Taxation (WAK-S) regarding the Public Liquidity Backstop

The SBA supports the introduction of a PLB for systemically important banks. The PLB is an established international mechanism and enhances financial stability in Switzerland. The PLB is intended to maintain confidence in the market and facilitate a successful restructuring or an orderly liquidation in bankruptcy. It helps ensure the continued provision of systemically important services. However, the SBA clearly rejects the proposed ex-ante fee for systemically important banks with substantial foreign operations. It effectively amounts to a new special tax on UBS.

Banks have no claim to the PLB. The decision to deploy it rests solely with the authorities in the event of a crisis and is subject to strict legal requirements. Furthermore, the Swiss National Bank (SNB) enjoys a privileged position relative to other creditors in the event of a bankruptcy. If the PLB is utilised, the bank concerned must already pay considerable premiums and interest to the federal government and the SNB. Any additional charge would be unjustified and discriminatory. It would apply only to UBS and would further weaken the bank’s international competitiveness.