A part of the public Swiss Post group, PostFinance has 2.7 million customers and CHF120 billion ($135 billion) in client assets, making it a “too big to fail” financial institution in Switzerland. However, despite having a banking licence it cannot grant loans or mortgages on its own balance sheet as it is state-owned (subsidised).
The government said on Wednesday it wanted PostFinance to be authorised to grant loans and mortgages. To this end, PostFinance must be separated from the Swiss Post Group and privatised.
Originally the government had proposed lifting the ban on PostFinance granting mortgages and loans and opening up its shareholding structure. During the consultation process, however, a large proportion of those concerned were not happy with this option. Doubts were expressed, in particular about constitutionality, competitive neutrality, federalism and financial market stability.
Change in law
The privatisation of PostFinance will require three major changes to the Postal Act. First, the provision that PostFinance is not permitted to grant mortgages and loans and the requirement that Swiss Post must hold a majority of the votes and shares in PostFinance are to be removed from the Act.
Second, the Act must be revised to free PostFinance from any obligation to render universal public services given its current integration into postal and payment services.
Finally, the government decided to add a provision which would enable the government to support Swiss Post in implementing the “too big to fail” legislation. As a systemically important bank, PostFinance must meet increased capital requirements.
Due to their reduced earning power, Swiss Post and PostFinance are unable to provide the additional capital required by the financial regulator in full and on time.
For this reason, the government, as the indirect owner of PostFinance, must guarantee that it will cover the remaining equity shortfall in the event of bankruptcy. This capitalisation guarantee must be limited in time and amount and remunerated at market conditions.
The Swiss Federation of Trade Unions said on Wednesday it vehemently opposed the privatisation of PostFinance. The institute is a people’s bank with almost three million customers and belongs to the general public as part of Swiss Post, it said.
Popular Stories
More
Swiss Abroad
Heimatort, sweet Heimatort: the unique Swiss concept of home
As a Swiss Abroad, how do you feel about the emergence of more conservative family policies in some US states?
In recent years several US states have adopted more conservative policies on family issues, abortion and education. As a Swiss citizen living there, how do you view this development?
Is your place of origin, your Heimatort, important to you?
Every Swiss citizen has a Heimatort, a place of origin, but many have never visited theirs. What’s your relationship with your Heimatort? What does it mean to you?
This content was published on
French and Swiss armoured and artillery units will train together to strengthen the defence capabilities of the Swiss army.
Harmful substances in particulate matter underestimated: Swiss research
This content was published on
Measurements significantly underestimate the amount of harmful substances in particulate matter, says an international research team under Swiss leadership.
Switzerland reopens its humanitarian office in Kabul
This content was published on
Switzerland opened its humanitarian office in Kabul in mid-March to provide targeted aid to the Afghan population in distress.
This content was published on
From Wednesday, a Swiss passport will no longer be sufficient to enter the UK - Swiss travellers will also need an electronic travel authorisation.
This content was published on
A German security expert could imagine Swiss soldiers being part of a peacekeeping force in Ukraine after an eventual ceasefire.
Leading Swiss politician favours closer EU defence ties
This content was published on
Co-president of Swiss centre-left Social Democratic Party calls on Switzerland to step up security cooperation in Europe.
SNB names PostFinance fifth ‘too big to fail’ bank
This content was published on
In August 2014, the SNB began assessing whether PostFinance was too big to fail and which of its functions were of systemic importance. In its decision of June 29, the SNB declared PostFinance to be a bank that was “systemically relevant”. This means that the bank is so important to the wider economic system in…
PostFinance faces renewed criticism by expat Swiss
This content was published on
The expatriate Swiss community has called for equal access to the services of PostFinance, but it stopped short of suing the state-owned company.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.