Reinforcement of Legal Certainty
: Central to the Banking Act's revision is the strengthening of regulatory frameworks governing Swiss Banks. This restructuring extends to defining the rights and roles of bank owners and creditors, especially in the context of bank insolvency or bankruptcy. These measures are crucial for bolstering legal certainty in the Swiss financial sector.Deposit Insurance Scheme Modification
: A significant amendment in the Banking Act concerns deposit insurance. Banks are now not obligated to secure their deposit insurance contributions solely through additional liquidity. Instead, this can be achieved by depositing securities or Swiss francs in cash with a custodian. This pivot ensures the availability of deposited values for deposit insurance if a Swiss bank fails to meet its payment obligations. Additionally, the revision has efficiently shortened the payout time of assets from deposit insurance to clients from twenty to seven days.Enhanced Security for Intermediated Securities
: In line with the Intermediated Securities Act, the revision mandates a clear segregation between a bank's own and its customers' portfolios. This measure is particularly vital when the custody chain involves foreign custodians, as it ensures the protection of securities booked with these entities. The revision also aims to improve the information provided to customers regarding their securities.Implications for Swiss Banks and Their ClientsStrengthening the Financial System
: The amendments to the Banking Act and Banking Ordinance
include more precise definitions and formulations concerning deposit insurance. For example, stipulations have been introduced for banks to make preparations for the swift payout of insured deposits in case of insolvency. The revision also empowers cantonal banks to issue special financial instruments tailored to their unique legal status. Moreover, it delineates financial and organisational requirements for unsupervised, important companies within a systemically important banking group. The revisions also impact large banks by replacing certain capital requirements with an incentive system, aiming to promote robust capital reserves.