“The most decisive factor for the long-term importance of the Swiss banking center is the alleviation of the too-big-to- fail issue,” Jordan said. “We have not yet achieved our objective.”
Switzerland now requires its two big, internationally active banks to adhere to a capital standard more stringent than that set out in Basel III rules. Jordan supported the stronger Swiss standard when he was the SNB’s vice president and responsible for financial stability.
“The current legal and organizational structures of the two global big banks do not yet ensure an orderly wind-down in the event of a crisis, although the measures they have already announced are all steps in the right direction,” Jordan said, referring to UBS and Credit Suisse.
Moreover, global rules need to be laid out for ensuring sufficient resources are available for winding down a systemically important bank in a crisis and that “bail-in” rules for the participation of creditors are in force, he said.