Switzerland’s lower house passed a bill to ban systemically relevant banks from paying some bonuses, limiting payouts for top executives and risk managers.
(Bloomberg) — Switzerland’s lower house passed a bill to ban systemically relevant banks from paying some bonuses, limiting payouts for top executives and risk managers.
The proposal from the Social Democrats was supported by 101 lawmakers, with 70 against, and now goes to the upper house for approval, in which case it would become law.
Switzerland has just weathered a crisis which forced the fusion of its two biggest financial institutions. Credit Suisse Group AG was taken over by UBS Group AG after becoming the first global systemic bank to near collapse since the 2008 market turmoil.
The implicit state guarantee received by large banks means that any risk such institutions take ultimately falls to taxpayers, said Prisca Birrer-Heimo of the Social Democrats, who submitted the proposal.
The government is itself mulling legal options to limit big bank bonuses, so the bill has been “surpassed by recent events,” Finance Minister Karin Keller-Sutter told lawmakers.
Aside from Credit Suisse and UBS, other institutions designated by the Swiss National Bank as systemically important are Raiffeisen Group, Zuercher Kantonalbank and PostFinance. That label means that they are already required to hold higher capital and liquidity buffers and maintain recovery and emergency plans.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.