SHARES in European banks Credit Suisse and UBS slumped yesterday after a spokesperson for Swiss finance minister Eveline Widmer-Schlumpf confirmed her comments in a newspaper that Swiss banks should be subject to a leverage ratio of six to 10 per cent, against the three per cent for global banks under rules that come into force in 2018.
Analysts and bankers warned yesterday that if Switzerland’s biggest banks had to meet a higher leverage ratio they could be forced to scale back their activities in important markets like bond trading, putting them at a competitive disadvantage.
Shares in UBS closed down 5.3 per cent while Credit Suisse fell 6.6 per cent after the comments, despite the spokesperson insisting that no proposals have been drafted.
UBS and Credit Suisse, the country’s two largest banks that form the backbone of a financial services industry accounting for six per cent of the economy, declined to comment.
City A.M. Reporter