On 17 December 2021, Parliament passed a partial revision of the Banking Act, providing better protection for bank clients under the deposit insurance scheme if a bank goes bankrupt. They are able to get their money back more quickly and financing is even more stable.
In February 2015, the Federal Council launched a partial revision of the Banking Act (Bankengesetz – BankG) entitled ‘Further development of deposit insurance’. The Federal Assembly’s recent approval of the BankG revision marks the completion of a parliamentary process that significantly strengthens deposit insurance in three areas.
All banks in Switzerland are already legally obliged to hold liquidity in case they are required to pay to the deposit insurance scheme. They are now required to deposit 50% of this payment obligation with a third-party custodian in advance in the form of securities or money. The remaining 50% is still subject to the strict liquidity requirements applicable to banks.
The payment obligations for all banks – currently CHF 6 billion – is being increased. The payment obligation is now based on a total of 1.6% of all covered deposits across the scheme and cannot fall below CHF 6 billion. With total covered deposits currently at CHF 489 billion (as of 31 December 2020), this results in a payment obligation of CHF 7.8 billion. This dynamically adapts to the current level of covered deposits.
One of the main purposes of deposit insurance is to quickly provide affected bank clients with enough money (up to a maximum of CHF 100 000 per client and bank) to meet their financial obligations. Within this context, the repayment period, which has so far not been legally regulated, will be shortened.