Banks with substantial capital reserves are not disadvantaged in the commercial market, according to Swiss National Bank Vice Chairman Antoine Martin. Speaking at an event in Basel on Wednesday, Martin emphasized that robust capital buffers enable domestic banks to withstand economic instability while expanding market share during periods of stress.
Martin’s remarks come as Swiss lawmakers prepare to debate stricter capital requirements for UBS, Switzerland’s largest bank. He suggested that in an unpredictable global environment, higher capital levels provide a strategic advantage, allowing well-capitalized banks to acquire struggling competitors when downturns occur. This approach, he argued, strengthens the domestic financial system by reducing reliance on foreign institutions that may face difficulties during crises.
Historical precedent supports Martin’s position. Banks with stronger capital positions outperformed peers after the global financial crisis, often capitalizing on opportunities to purchase assets from weaker institutions. The SNB’s stance aligns with its broader policy of prioritizing financial stability over short-term competitive dynamics.
