ZURICH - SWITZERLAND is planning tougher oversight rules for its two biggest banks, given their importance to the country’s economy, said a senior central banker.

UBS, Switzerland’s biggest bank, is Europe’s hardest-hit victim of the global credit crisis, with write-downs of some US$37 billion (S$50.9 billion), while Credit Suisse has been forced to write down roughly US$10 billion.

Swiss National Bank vice-chairman Philipp Hildebrand would neither specify nor quantify the new measures that he said on Monday would not be in place before 2010.

‘It would be dramatic for Switzerland if a big bank really ran into solvency troubles. Therefore, there will be a special regime,’ he said at a business event.

The Swiss Federal Banking Commission would take a lead role in implementing the rules, now being discussed with the banks, Mr Hildebrand said during a panel discussion.

While the Swiss would be looking for as much international consensus as possible, it might set tougher rules than other countries, he said.

‘In the case of Switzerland, they will reflect the particular situation of Switzerland, the vulnerability due to the size,’ he said.

At the Zurich Efficiency Club event, UBS chief executive Marcel Rohner said a significant part of the credit market turmoil was over, even as his bank reduced risk positions it considered too large.

‘We are certainly not at the end of it yet,’ he said. ‘We still have risk positions that we consider to be too large.’

Mr Hildebrand agreed that the credit crisis had entered the ’second half’, but added that ‘the second half can be long’.

Much depends on the stabilisation of the United States real estate market where the crisis began, and forecasts remained difficult to make, he added.

REUTERS