SNB welcomes measures to strengthen ‘too big to fail’ regulations

• "The draft version of the Liquidity Ordinance stipulates that systemically important and medium-sized banks must prepare sufficient collateral for accessing liquidity support from central banks. For the SNB to be able to provide liquidity support when needed, banks must be in a position to transfer their assets as collateral to the SNB. In order to strengthen financial stability, it is also important that as many banks as possible make the preparations to participate in the Extended Liquidity Facility (ELF), which will be available from the beginning of 2027."

This is the Swiss TBTF reform programme working its way through the pipeline, the legislative follow-through to the domestically engineered rescue of Credit Suisse by UBS, and SNB endorsement of this kind has historically signalled the measures will survive the consultation process largely intact. The mechanism here is operational rather than capital-based: pre-positioned collateral and mandatory readiness for the central bank's emergency lending facilities, which shifts the binding constraint in a Swiss banking stress from the central bank's willingness to lend to the banks' ability to mobilise eligible assets. The distinction worth drawing is between liquidity-preparedness rules of this sort, which carry modest ongoing compliance cost, and the capital surcharge strand of the same reform package, which is where the debate over UBS's competitive position against global peers has concentrated and where the equity read-through has historically sat. Central bank support for broad participation in standing emergency facilities also follows an established post-crisis pattern of normalising the discount-window-equivalent before it is needed, reducing stigma. Follow-ons are the consultation responses from the banks, the capital strand of the ordinance, and parliamentary handling, where prior form suggests dilution risk rises as the process lengthens.