Federal Council decides on prompt introduction of net stable funding ratio

Bern, 20.11.2019 - During its meeting on 20 November 2019, the Federal Council established the timetable for introducing a net stable funding ratio (NSFR). The NSFR is aimed at ensuring the stable financing of banks over the long term. The Federal Council intends to adopt the associated ordinance amendments in early summer 2020, and bring them into force by mid-2021.

The Liquidity Ordinance sets out the regulatory requirements on the liquidity management and monitoring of banks. The ordinance defines both the qualitative and quantitative requirements in this area and transposes the international standards of the Basel Committee on Banking Supervision (Basel Committee) into Swiss law. Following the introduction of the liquidity coverage ratio (LCR) in 2014, the remaining requirements of the Basel Committee, i.e. on the funding ratio, are now to be implemented. Complementing the LCR, which boosts banks' resilience in the case of short-term liquidity crises, the NSFR aims to ensure stable funding over the long term.

Under the original timeline set by the Basel Committee, the NSFR provisions were due to enter into force on 1 January 2018. Owing to delays in implementing the NSFR in the European Union and the United States, the Federal Council has refrained from introducing the ratio in Switzerland to date. However, it is now clear that the EU will be introducing the NSFR by mid-2021, and there are indications that the US could also introduce such a ratio relatively quickly. The Federal Council has therefore instructed the FDF to finalise the regulatory texts jointly with the interested parties, and to submit the Ordinance in early summer 2020 for adoption by the Federal Council. The NSFR can then be brought into force by mid-2021.


Address for enquiries

Anne Césard, Communications, State Secretariat for International Finance SIF
Tel. +41 58 462 62 91, anne.cesard@sif.admin.ch


Publisher

The Federal Council
https://www.admin.ch/gov/en/start.html

Federal Department of Finance
https://www.efd.admin.ch/efd/en/home.html

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