Swiss to adopt tougher trading book rules in Jan

* Implementation of Basel norm a year ahead of global peers

* Gov’t revises ordinance as requested by Swiss regulator

ZURICH, Nov 10 (BestGrowthStock) – Switzerland tightened its banking
regulations on Wednesday, obliging the country’s lenders to meet
strict new standards a year ahead of their global peers on the
capital they must hold to cover risks from trading operations.

The Swiss cabinet said in a statement the new rules would
come into force on Jan 1, 2011.

Switzerland led a global push for tougher regulations after
the government had to bail out the country’s largest bank, UBS
(UBSN.VX: ), at the height of the financial crisis.

“The … crisis made it quite clear that the risks of loss
attached to trading activity and securitisation were underpinned
by insufficient capital levels,” the cabinet said.

It said it had revised the country’s Capital Adequacy
Ordinance, as requested by Swiss regulators in July

The country is adopting regulations drawn up by the Basel
Committee of central bankers and supervisors, as well as
European Union standards on the risks banks incur in the
interbank market. After intense lobbying, the Committee agreed
to delay implementation of the requirements.

U.S. Treasury Secretary Timothy Geithner and European Union
financial markets chief Michel Barnier agreed last month on a
December 2011 implementation date for the new trading book
rules. [ID:nN29277050]

“The stricter regulations envisaged will affect the big
banks to the same degree as their international competitors.
They will also hit the other banks to varying degrees,” the
Swiss government said.

Switzerland has already introduced higher capital
requirements, a leverage ratio, a stricter liquidity regime and
new rules for bankers’ pay.

Last month, it announced even tougher rules for UBS and
Credit Suisse (CSGN.VX: ), telling them to hold more capital than
international rivals to prevent a bank failure crippling the
country. [ID:nLDE6920GP]

For full statement, click here:

(Reporting by Emma Thomasson; Editing by John Stonestreet)

Swiss to adopt tougher trading book rules in Jan