Raiffeisen coop bank group ‘too big to fail’
Malcolm Curtis · 13 Aug 2014, 10:33
Published: 13 Aug 2014 10:33 GMT+02:00
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The Swiss National Bank (SNB) said it informed the group of its decision to designate the Raiffeisen Group as a “financial group of systemic importance” on June 16th.
The SNB said it made the decision in consultation with Raiffeisen and the Swiss Financial Market Supervisory Authority (FINMA).
The announcement came on the same day that Raiffeisen reported a 1.5 percent drop in net profits to 363 million francs ($399 million) for the first half of 2014 compared to the same period a year earlier.
With 305 autonomous banks and 1,083 branches particularly active in mortgage financing, the group had assets of 183 billion francs as of June 30th.
Raiffeisen joins the largest Swiss banks UBS and Credit Swiss among those judged by the central bank as “too big to fail” without causing significant economic problems.
The SNB regards the services provided by Raiffeisen as “indispenable to the Swiss national economy and cannot be replaced in the short term”, the coop group said in a news release.
Raiffeisen said the designation means that it will be required to take measures to reduce risks, not yet detailed, to satisfy the requirements of FINMA.