Exclusive-Swiss authorities, banks mull new rules to prevent bank runs -sources

investing.com:

By Stefania Spezzati, Oliver Hirt and Elisa Martinuzzi

LONDON/ZURICH (Reuters) — Swiss authorities and lenders, including UBS, are discussing new measures to prevent bank runs after Credit Suisse’s rescue earlier this year, four sources familiar with the matter said, a move that could affect billions in deposits.

The talks, which have not been previously reported and are part of a broader review of the country's banking rules, are intended for the top Swiss banks and could target mainly their wealth clients, two of the sources said.

Among the measures being discussed is the option to stagger a greater portion of withdrawals over longer periods of time, one of the sources said. Imposing fees on exits is also an alternative being discussed, two of the sources said.

Rewarding clients who tie up their savings for longer with higher interest rates is being debated, one of the sources said.

Discussions are in the early stages, according to two sources. The Swiss National Bank and the Swiss Finance Ministry are part of the conversations with lenders, one source said.

A representative for the finance ministry said that the issue of bank runs is part of an overall evaluation of the too-big-to-fail regulatory framework in Switzerland. The Swiss government is due to publish a report in spring next year, he added.

The SNB said the review of too-big-to-fail rules, which focuses on so-called systemically important banks, is ongoing. The central bank declined to comment on ongoing work.

UBS declined to comment.

Reuters could not determine which other banks were involved in the conversations with Swiss authorities.

In Switzerland, UBS, Raiffeisen Group, Zürcher Kantonalbank and PostFinance are deemed systemically important lenders