Revision of the law

The partial revision of the Banking Act, expected to enter into force on 1 January 2023, will further optimise Switzerland’s proven deposit insurance scheme.

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.

Stronger depositor protection

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.

1. Financing made even more robust

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.

2. Dynamic regulation of payment obligations

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.

3. Faster repayments to clients

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.

Most important changes at a glance

Current payout deadline
  • Money from esisuisse to reach the liquidator within 20 working days
  • No statutory deadline for payout to clients
New payout deadline
  • Money from esisuisse to reach the liquidator within 7 working days
  • Payout to client within 7 working days of receiving client payment instructions
Current bank preparations
  • Minimal reporting of protected deposits
  • No statutory requirements governing the payout process
New bank preparations
  • Determination of protected deposits per client (standardised depositor list)
  • New processes at each bank to prepare for its closure
Current collateral for financing
  • Bank liquidity requirements
New collateral for financing
  • Bank liquidity requirements
  • 50% of the payment obligation backed by securities or loans
New size of payment obligation
  • Size corresponds to 1.6% of the protected deposits (as at 31 December 2020: CHF 7.8 billion)
  • Minimum of CHF 6 billion