Swiss stocks declined from their highest level since May as bank shares fell after the European Central Bank adopted a stricter definition of capital for next year’s stress tests on lenders.
UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s largest lenders, led losses. Syngenta AG (SYNN) climbed 1.4 percent after HSBC Holdings Plc advised investors to buy the shares. Temenos Group AG advanced 1.1 percent after saying it is confidence of achieving its fourth-quarter growth target for licensing fees. Basilea Pharmaceutica (BSLN) AG rallied to its highest price in almost four years after winning European approval for a drug.
The SMI (SMI) dropped 0.3 percent to 8,187.96 at 9:56 a.m. in Zurich. Even so, the gauge has gained 2 percent so far in October as U.S. lawmakers reached an agreement to avoid a sovereign default. The broader Swiss Performance Index lost 0.3 percent today.
The volume of shares changing hands in SMI-listed companies was 40 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
The ECB said its definition of capital will become stricter for stress tests on banks, compared with the one it will use for an imminent review of their assets. The central bank also said it will require lenders to maintain a capital ratio of 8 percent.
The ECB will carry out a preliminary risk check early next year to identify asset portfolios needing further examination, followed by a full review of the quality of banks’ balance sheets. The European Banking Authority will then help conduct a stress test to assess their sovereign-debt holdings.
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