Switzerland’s Too-Big-to-Fail Plan Is Flawed, Ex-BOE Deputy Says

Switzerland’s approach to winding down a globally-systemic bank such as UBS Group AG has features which could worsen the turmoil in a hypothetical future crisis, according to a key architect of global financial rules.

The country’s “Too-Big-To-Fail” regime is too focused on preserving local activities in the event of a break-up, said Paul Tucker, former Deputy Governor of the Bank of England and a current research fellow at the Harvard Kennedy School.

The Swiss system is currently undergoing significant reform after last year’s near-collapse of Credit Suisse and its subsequent takeover by UBS. The merger created a bank ...