At the start of 2020, surely none of us could have foreseen what lay ahead. While the corona crisis sent shockwaves through the foundations of our society, bank customers’ confidence about their deposits remained intact – also thanks to the presence of esisuisse. Switzerland’s deposit insurance system has been, and remains, a key pillar of trust in the stability of our financial centre.
The pandemic has highlighted the importance of reliable and robust institutions when managing a crisis, and esisuisse is unquestionably just such an institution. Supported as it is by all Swiss banks, it enjoys widespread acceptance.
Deposit insurance in Switzerland is more sustainably funded than it is in other countries. It includes payouts of protected deposits from a closed bank’s remaining liquidity, preferential treatment of deposits in the event of bankruptcy, and a rule requiring banks to hold assets representing at least 125% of their preferential deposits. That means that if a crisis hits, we are well placed to deal with it. When the ongoing revision of the law is complete and the new rules come into force, we will be able to pay out protected deposits faster than we do now. The efforts of esisuisse and the banks will not suffice on their own, however, the authorities will also have to prepare thoroughly.
The coronavirus pandemic dominated the year. Already well advanced in the digital transformation, esisuisse was able to continue operating securely, reliably and without problems under difficult conditions, with many staff working from home.
Reform of Switzerland’s deposit insurance scheme was once again a key area of esisuisse’s work during 2020. In June, the Federal Council adopted amendments to the Banking Act in respect of deposit insurance, and autumn saw the start of parliamentary deliberations in the National Council specialist committee responsible. esisuisse was involved in this process as an organisation of experts, engaging in intense discussions with representatives from politics, the associations and the authorities.
Launched in 2018, the «Operational Readiness» project aims to optimise procedures in the event of a payout case. These were further improved and documented during 2020. The findings of a test case conducted in autumn involving a simulated bank closure also enabled esisuisse to improve its crisis preparations.
esisuisse plays an active role in both the International Association of Deposit Insurers (IADI) and the European Forum of Deposit Insurers (EFDI). In November 2020, esisuisse’s CEO Gregor Frey was confirmed as a member of the IADI’s Executive Council. The aim of this international commitment is to further increase understanding of Swiss deposit insurance and to create acceptance. These activities are of key importance in anticipating future regulatory trends and being able to influence them. Many specialist bodies and experts that work on the international development of deposit insurance also help to assess its implementation in the member countries.
In June 2020, the General Meeting of Members adopted an amendment to esisuisse’s Articles of Association and appointed a Board Committee Case made up entirely of Board members who are not employed or mandated by a bank. In the event of a payout case, the committee is tasked with overseeing the work of the Office until the case has become public.