The Confederation, the SNB, and the Swiss Financial Market Supervisory Authority (FINMA) have compiled a package of measures together with the banks to deal with the impact of COVID-19 crisis. In this context, SNB is introducing a new COVID-19 refinancing facility for banks from March 26, 2020. In addition, after consulting with FINMA, SNB submitted a proposal to the Federal Council requesting that the countercyclical capital buffer (CCyB) be reduced to 0%, with immediate effect. This is designed to further support the banks in their key role as lenders.
The COVID-19 refinancing facility is aimed at strengthening the supply of credit to the Swiss economy by providing the banking system with additional liquidity. There is no upper limit on the amounts available under the facility and draw-downs can be made at any time. The refinancing facility will operate in conjunction with the federal government’s guarantees for corporate loans. The facility allows banks to obtain liquidity from SNB, which is secured by the federally guaranteed loans, thus enabling banks to expand their lending rapidly and to access the required liquidity.
Keywords: Europe, Switzerland, Banking, COVID-19, CCyB, Refinancing, CRF, Credit Risk, Regulatory Requirements, FINMA, SNB
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