Furthermore, a look at the various regulatory packages in their entirety shows that the future requirements for internationally active, systemically important financial institutions will be designed differently at global level. Ultimately, however, they will differ in rigour only as far as the respective national regulators deem necessary in response to country-specific risks. Is the Swiss package of measures being introduced too quickly? A third objection concerns the pace of the regulatory reforms. Compared with other countries, the implementation of the Swiss package of measures is regarded as too hasty in some quarters. One concern is that significant aspects have not been properly considered when drafting the package, with the ultimate consequence that the TBTF problem is not tackled effectively. First of all, it is important to remember that the latest crisis reached its peak some three years ago. It is therefore entirely inappropriate to refer to the Federal Council’s proposal as hasty. On the contrary, the committee of experts worked intensively on drawing up a proposal supported by all groups involved. The administration conducted a thorough analysis and carried out an extensive consultative process. The Federal Council has thus been able to put forward a sophisticated package of measures. This method of proceeding is in keeping with the Swiss tradition of taking the necessary action while avoiding snap decisions. However, actually implementing these rules will take some time. Because of the pressing need for reform in Switzerland, it is not practicable to wait for the international bodies to complete their work in this area.

chart 9).10 When comparing regulatory packages at international level, it is therefore important not to look at capital adequacy requirements in isolation. Additional measures with far-reaching effects on economic freedom can have grave unintended consequences. They therefore end  7  In the form of minimum common equity. 8  10% common equity (Swiss proposal) vs. 7% common equity plus 1% systemic capital surcharge (Basel III). 9  The financial market regulation reform package was passed in the US in summer 2010. 10  The European Commission proposes that a permanent European bank bail-out fund should be set up starting in 2013. Furthermore, the EU have called for size restrictions on banks in receipt of state aid (ING and Commerzbank) and divestitures (ING had to sell ING Direct USA). Lloyds Banking Group and Royal Bank of Scotland are also expected to shrink their balance sheets. In the United Kingdom, the Independent Banking Commission (the equivalent of the Swiss TBTF commission of experts) proposed high capital requirements alongside structural changes. Universal banks therefore have to separate out their UK retail business (no subsidiarity as in Federal Council proposal). BIS central bankers’ speeches  5  up costing considerably more than measures that create targeted incentives to allow market discipline to operate again. To sum up, an analysis of international differences in regulation shows that, in the past, stricter capital regulation was in fact a competitive advantage rather than a disadvantage for Swiss banks.