Government plans improved depositor protection

The Swiss government has proposed increasing guarantees for bank deposits more than threefold to SFr100,000 ($86,000), the finance ministry announced on Wednesday.

This content was published on November 5, 2008 - 14:17

The current limit for state-backed guarantees on deposits is SFr30,000. The Swiss parliament is set to discuss the issue at its winter session and must approve the increase before it can take effect.

To back the guarantees, the government would increase the overall amount set aside by banks to safeguard deposits to SFr6 billion from the current SFr4 billion. The change will be valid until the end of 2010.

The new protection limit would surpass that already established by the European Union, which last month increased the guarantee to €50,000 (SFr75,300).

The government also announced that the Federal Banking Commission would finalise stricter capital requirements with the Swiss big banks, UBS and Credit Suisse, by the end of the month.

The banks will then have until 2013 to put aside the extra capital needed to comply.

"We are forcing the banks to put aside more liquid assets in Switzerland," commented Finance Minister Hans-Rudolf Merz at a news conference in the capital, Bern.

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