News

Law

Asset Management

Investment Banking

Wealth

Hedge Funds

People

Newsletters

Events

Lists

Investment Banking

How a banking capital of the world botched its own banking rules

Switzerland tried to make its banks safer. Instead, regulators missed opportunities to ensure Credit Suisse’s health.

Switzerland’s tough bank capital rules are being overhauled after Credit Suisse’s collapse
Switzerland’s tough bank capital rules are being overhauled after Credit Suisse’s collapse Photo: Bloomberg via Getty Images

Switzerland wanted its big banks to be fortresses. In practice, the country’s “too big to fail” banking laws made a sandcastle of Credit Suisse.

The Swiss rules in question have become an object lesson in the difficulties of designing financial regulation. Created to prevent a repeat of the 2008 financial crisis bailouts, Switzerland’s customised version of international capital requirements laid the groundwork for the biggest bank rescue since.

WSJ Logo