ZURICH, June 15 (Reuters) - Switzerland's two biggest banks, UBS and Credit Suisse, are on track to meet the country's updated too-big-to-fail rules but more progress is needed in preparing plans for a potential insolvency, the Swiss central bank said on Thursday.
"In particular, by end-2019, the big banks will need to demonstrate that they would be able to maintain their systemically important functions in Switzerland in the event of impending insolvency," the Swiss National Bank (SNB) wrote in its annual financial stability report.
Switzerland has already settled on its too-big-to-fail rules, which included a headline requirement for UBS and Credit Suisse to hold core capital worth 5 percent of total assets. At least 3.5 percent of the leverage ratio is to be made up of high-quality common equity tier 1 (CET1) capital.
The rules are designed to protect Switzerland's economy from a banking crisis.
Reporting by Joshua Franklin