The demise of Credit Suisse in March 2023 has called into question banking regulations and supervision. But it also highlights how their mere existence, implying that they are fit for purpose, is not enough to prevent a crisis.
On March 15, before the UBS takeover, Credit Suisse’s regulatory capital ratios were above prudential requirements. Its Common Equity Tier 1 capital (CET1) was stable at almost 15%, and its leverage ratio for total loss-absorbing capacity was 15%, both about one-third higher than called for.
