Swiss Parliament Blocks Public Liquidity Backstop for Major Banks Amid Tariff Debate
Swiss lawmakers have rejected a plan to introduce a public liquidity backstop for major us banks while debating a controversial rise in agricultural tariffs. The National Council voted against the banking measure, which would have saved the federal budget CHF 140 million annually. Instead, discussions turned to a proposed CHF 175 million increase in import duties for food and farming—sparking sharp divisions among politicians.
The National Council decisively dismissed the public liquidity backstop (PLB) for systemically important banks, with 142 votes against, 45 in favour, and 6 abstentions. The rejected scheme aimed to relieve federal finances by CHF 140 million per year from 2027. Despite this, the Confederation has already strengthened banking safeguards, including Basel III standards implemented in January 2025 and liquidity programmes like the SNB's Liquidität gegen hypothekarische Sicherheiten (LGHS), tested by Hypothekarbank Lenzburg in August 2025.
Attention then shifted to agriculture, where a proposal to raise import duties by CHF 175 million split opinions. Supporters, including Pius Kaufmann (Centre/LU), argued the move would bolster domestic food security without violating international trade rules. Opponents, like Andreas Gafner (EDU/BE), warned it could disrupt markets and push down producer prices. Finance Minister Karin Keller-Sutter questioned the timing, while EVP's Niklaus-Samuel Gugger called the idea 'crazy', predicting broader economic harm.
The rejection of the PLB leaves existing banking safeguards in place, including Basel III reforms and SNB liquidity tools. Meanwhile, the agricultural tariff debate remains unresolved, with lawmakers weighing food security against market risks. No final decision has been made on the CHF 175 million duty increase.
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