The worldwide regulatory regime for “too large to fail” banks arrange after the 2008 disaster doesn’t work, based on Switzerland’s finance minister.

In an interview with Swiss newspaper NZZ on Saturday, Karin Keller-Sutter — who was on the centre of Swiss authorities’ rush to rescue Credit score Suisse final weekend — stated following the emergency protocols which can be on the centre of the regulatory structure for large banks “would have triggered a global monetary disaster”.

Capital buffers and further regulatory guidelines on threat have been helpful for navigating instances of stress, Keller-Sutter stated, however in an actual disaster, plans to facilitate the orderly rescue or wind-down of massive banks are insufficient.

“Personally I’ve come to the conclusion . . . {that a} globally energetic systemically essential financial institution can’t merely be wound up based on the ‘too large to fail’ plan,” she stated. “Legally this is able to be doable. In observe, nevertheless, the financial harm could be appreciable.”

Final weekend was “clearly not the second for experimentation”, she added in her first interview because the disaster erupted. “The crash of Credit score Suisse would have dragged different banks into the abyss.”

The finance minister, who took up her submit on the finish of December, stated issues over Credit score Suisse’s liquidity had been her first query to civil servants when she began in workplace.

She stated she requested three months in the past: “When will the purpose be reached at which the authorities need to intervene; at which level will Finma come to the conclusion that CS is now not viable?”

Keller-Sutter sat on the centre of the emergency negotiations, representing Switzerland’s governing Federal Council and co-ordinating with the Swiss Nationwide Financial institution and market regulator Finma.

The eventual rescue plan, wherein the financial institution was taken over by its larger rival UBS, has come underneath intense criticism, a lot of it centered on the determination by Finma to wipe out SFr16bn of convertible bonds whereas preserving some worth for Credit score Suisse fairness holders.

Bondholders have pledged to take Swiss authorities to courtroom in what might be a prolonged and high-profile litigative course of.

Keller-Sutter didn’t reply questions on the choice to wipe out Credit score Suisse’s subordinated debt holders, however advised NZZ that the takeover by UBS was the one viable choice, and the federal government did what it may to facilitate the deal whereas looking for to scale back any burden on Swiss taxpayers.

Domestically, the merger of the nation’s two greatest banks — for which the federal government has written a SFr9bn assure and authorised a SFr100bn liquidity line from the SNB — has proved deeply unpopular.

A ballot launched on Friday confirmed that three-quarters of Swiss individuals surveyed supported laws to interrupt up the brand new entity, with a majority harbouring critical issues that the federal government had overstepped its authority.