SNB Vice Chairman Martin: Robust capital buffers are not a disadvantage for banks

Swiss National Bank Vice Chairman Antoine Martin stated that banks maintaining substantial capital reserves are not necessarily at a commercial disadvantage compared to their competitors. Speaking in Basel, Martin suggested that banks with higher capital levels performed well after the global financial crisis, enabling them to acquire rivals that faced difficulties.

Martin indicated that in an unstable environment, he would prefer Swiss banks to possess robust capital buffers, allowing them to capture market share from foreign banks that might falter during future downturns. He did not name specific institutions.

This stance comes as Swiss lawmakers are set to debate more stringent capital requirements for UBS. The Swiss National Bank has previously expressed its continued support for the banking regulation measures proposed for UBS by the Federal Council in June. Martin described these measures as appropriate, targeted, neither extreme nor excessive, and crucial for a bank of UBS's size operating in Switzerland.

The proposals, aimed at preventing future banking crises following the 2023 collapse of Credit Suisse, could require UBS to hold as much as $24 billion in additional capital. Martin, whose responsibilities include overseeing banking stability in Switzerland, emphasized the importance of robust regulations for large financial institutions.