Authored by Ross P Buckley, Rolf H. Weber & Mary Dowell-Jones

Published as (2015) 10 (1) Capital Markets Law Journal 41-70

Key Points:

• The global financial crisis of 2008-9 placed the ‘too-big-to-fail’ issue at the forefront of public and regulatory debate;
• This paper presents a comparative study of regulatory measures taken to address this issue in Switzerland and Australia;
• Australia’s banking system was distinguished from its peers in advanced economies during the crisis as it did not require substantial injections of public money.  Although no Australian banks are global systemically important financial institutions, it does have a sizeable too-big-to-fail problem in the domestic financial system that requires a targeted regulatory response;
• Switzerland offers an interesting comparative study for Australia because Switzerland has responded to its too-big-to-fail problem with a market leading package of measures that go far beyond that required by Basel III, in response to the problems of UBS during the crisis. 
• Despite differences in the two countries’ financial systems, this article seeks to identify the lessons that can be drawn for Australia from Switzerland.