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Basel III D: Swiss Finish to Basel III

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Abstract

After the Basel Committee on Banking Supervision (BCBS) introduced the Basel III framework in 2010, individual countries confronted the question of how best to implement the framework given their unique circumstances. Switzerland, with a banking industry that is both heavily concentrated and very large relative to the size of its overall economy, faced a special challenge. It ultimately adopted what is sometimes referred to as the "Swiss Finish" to Basel III--enhanced requirements applicable to Switzerland's "too-big-to-fail" banks Credit Suisse and UBS that go beyond the base requirements established by the BCBS. Yet the prominent role played by relatively new contingent convertible capital (CoCos) in the Swiss Finish, coupled with the fact that banks are allowed to use their own internal models in determining whether requirements are met may call into question the extent to which the Swiss Finish to Basel III represents a meaningful enhancement to the risk-based capital requirements of the Basel framework.

Suggested Citation

  • Metrick, Andrew, 2019. "Basel III D: Swiss Finish to Basel III," Journal of Financial Crises, Yale Program on Financial Stability (YPFS), vol. 1(4), pages 81-90, March.
    • Handle: RePEc:ysm:ypfsfc:1466
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    References listed on IDEAS

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    1. Ms. Sofiya Avramova & Mrs. Vanessa Le Lesle, 2012. "Revisiting Risk-Weighted Assets," IMF Working Papers 2012/090, International Monetary Fund.
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    More about this item

    Keywords

    BCBS; Basel III; 2010; Swiss Finish; TBTF; Too big to fail; CoCos; bail-in; RWA;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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