Regulators in other countries are working to reduce the damage. The European Banking Authority (The Single Resolution Board) and the ECB Banking Supervision panel issued a joint declaration.
They said:
The European Union’s resolution framework implements the Financial Stability Board recommendations after the Great Financial Crisis. This includes the order in which creditors and shareholders of troubled banks should shoulder losses.
Particularly, the common equity instruments absorb losses first, and Additional Tier One is only possible after their full usage.
This approach was used consistently in previous cases and will continue guiding the actions of SRB and ECB bank supervision in crisis interventions.
Parties from all political parties in Switzerland raised concerns about the large amounts of liquidity that the central bank and government aid provide. Credit Suisse and UBS are expected to benefit from approximately 260 billion Swiss francs ($280 billion) in state and central bank support, which amounts to a third of the country’s gross domestic product. This aid is in the form 250 billion in…
