Switzerland’s cantonal banks keep much more capital than required – but unlike at UBS, their buffers go largely unnoticed.
Switzerland's 24 cantonal banks hold CHF839 billion in assets with core equity buffers up to 13.4% above legal minimums, outpacing UBS's Swiss business (CHF501 billion). Public cantonal ownership mutes return pressure, but the structural overcapitalization signals a capital allocation inefficiency that regulators and European banking risk teams should monitor.
Zurich Cantonal Bank is the biggest of the 24 cantonal banks in Switzerland.
Keystone / Claudio Thoma
Switzerland’s cantonal banks keep significantly more equity capital than legally required – but unlike for UBS, their capital levels go largely unnoticed.
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