BERN, April 28 (Reuters) - Swiss banking regulation and
supervision must be reviewed following the collapse of Credit
Suisse , Swiss National Bank Chairman Thomas Jordan said
on Friday, although he warned against "quick fixes."
The central bank played a key role in the state-engineered
rescue of Credit Suisse, making 250 billion francs of emergency
liquidity available to prevent its collapse and ease its
takeover by UBS .
The provision of the emergency loans was secured using Swiss
emergency law, a controversial measure which allowed the
government to sidestep parliament.
"Banking regulation and supervision will have to be reviewed
in light of recent events," Jordan told the SNB's shareholders
at their annual meeting in Bern, referring to the Credit Suisse
crisis.
"This will require in-depth analysis. Quick fixes must be
avoided," he added.
In the future, regulations will have to compel banks to hold
sufficient assets which can be delivered as collateral to allow
existing liquidity facilities to be used, he said.
This would allow the central bank to be able to provide the
necessary liquidity without the need for emergency law.
Jordan said the central bank was now at the limit of the
help it could provide under the so-called emergency liquidity
plus (ELA+) scheme.
"In granting ELA+, we are going to the limits of what is
feasible for the SNB, because with this loan preferential rights
in bankruptcy proceedings are the sole security."
Still, Jordan said the money, of which 108 billion francs
was injected in the first quarter, was not a gift to the banks
and would have to be repaid - with interest.
Jordan also noted that Swiss inflation had exceeded the
SNB's target range of 0-2% for the last year, reaching 3.2% in
the first 3 months of 2023.
"Prices went up more than we would have liked," he said,
leaving the door open for further interest rate hikes.
"At our most recent monetary policy assessment in March, we
emphasized that we would continue to tighten monetary policy if
necessary."
(Reporting by John Revill; Editing by Toby Chopra)
Messaging: john.revill.thomsonreuters.com@reuters.net))
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