The Swiss government has relented in some aspects of its regulation of shareholders' equity, giving in to some demands of the big banks – an overview.

The intensive pressure by the big banks against the tighter rules on shareholders' equity has paid off. The government has eased its position on several aspects according to a report by «NZZ» (article behind paywall).

1. Linear, not Progressive

The government originally aimed at a double progression: if the balance sheet exceeded 1.05 trillion francs, the banks would have had to build shareholders' equity at a faster pace. Now, the government is demanding a linear increase in equity.

2. Conversion Capital: Emergency Decline

Banks have to keep a conversion capital of 3 to 5 percent in excess of the shareholders's equity ratio of 5 percent for emergency purposes. This ruling has now been adjusted in favor of the banks. The regular requirement for a 5 percent conversion capital for emergency purposes can be lowered by two percentage points.

3. Swiss Law

The government altered its plans also in a further aspect ruling the conversion capital for emergency purposes. The institutes won't be bound by Swiss law in the emission of the so-called Coco-bonds.

The big banks however failed with their demand to have the domestic business as a measure for capital requirements instead of the entire business. The reason for this was that the finance ministry assumes the Swiss business of the big global banks as integral part of the groups even accounting for the legal separation of these units, «NZZ» said.