The Swiss National Bank yesterday urged the country’s biggest banks, UBS and Credit Suisse, to improve their leverage ratios in order to better withstand a potential crisis.

Switzerland is expected to hold off on outlining tougher capital requirements, known as leverage ratio targets, for its biggest banks until new international standards are outlined later this year.

“The SNB recommends that the big banks do not lose momentum in their efforts to improve their resilience,” the central bank wrote in its annual financial stability report.

Switzerland will often gold-plate international requirements with a “Swiss finish” but the SNB said the country’s biggest banks were not currently ahead of rivals when it came to their leverage ratios.

“Swiss big banks’ risk-weighted capital ratios are above the average for large globally active banks, the same cannot yet be said for their leverage ratios,” the SNB wrote. In a statement UBS warned that excessive requirements could hurt Switzerland’s banks and economy.

“Unnecessary higher capital requirements and further regulation will not only have an impact on the Swiss financial centre, but more importantly, the associated costs will negatively impact the Swiss economy,” UBS said.

“Those facts and consequences are missing in the report.”

This month UBS’s chairman and the head of Switzerland’s financial watchdog clashed over the country’s need to have tougher targets for its own banks than the global standards for the industry.

A spokeswoman for Credit Suisse declined to comment on the report.

The central bank said Switzerland’s biggest banks should prepare for the likelihood of increased capital requirements from domestic and international regulators. The SNB also said big banks’ loss potential relative to their capitalisation continued to be “substantial”.

Solving the “too big to fail” problem has been a priority for regulators in the US and Europe after several banks, including Zurich-based UBS, were bailed out in the 2007-2009 financial crisis.