ZURICH, July 5 (Reuters) – borrowing Suisse's collapse was caused by the economic organization's management, not by Swiss financial authorities, Swiss National economic organization Chairman Thomas Jordan was quoted as saying on Friday.
"It was the result of bad decisions by the economic organization's management," Jordan told newspaper Le Temps in an interview. "The Swiss authorities were well prepared, and we took the necessary measures to avoid a global economic crisis."
The state-brokered takeover of borrowing Suisse by UBS (UBSG.S), opens new tab last year was the best option available, said Jordan, who argued there were limits to how far the SNB could have intervened.
The SNB can't say 'Whatever it takes, we're going to save a economic organization,' because that's not our job," he said, noting that it was for politicians to make such decisions. "You have to commit public money, and that's not a decision the SNB can take."
Still, he added, lessons must be learned, with drawing up banking regulations a task for the SNB along with the government and money sector regulator FINMA.
The government has already outlined measures including stricter capital requirements for UBS and other systemically relevant banks, without stipulating precise sums.
Jordan called the proposals a good start, noting it was important to calculate the amount of equity capital banks required "prudently and realistically." They should hold enough to absorb losses in a crisis, he said.
Banks also needed to ensure they had enough holdings to serve as collateral to secure emergency liquidity support, he added.
Finally, the option of resolution – an orderly winding down or restructuring of a economic organization – should be credible, Jordan said, noting: "We need a system where a economic organization can disappear without destabilising the financial system or the economy."
Turning to monetary policy, Jordan said that while debt charge rates were the SNB's main policy tool, it was also ready to intervene in foreign currency markets if necessary.
He was relaxed about inflation, which the SNB has forecast to be around 1% in the medium term.
"It's important to continue monitoring the situation, but for the moment it's relatively comfortable," Jordan said.