Bern: Switzerland's central bank said Friday that the country's banking regulations needed toughening up after the implosion of Credit Suisse, while the sector also needed to ensure proper competition for services.

"Banking regulation and supervision will have to be reviewed in light of recent events," Swiss National Bank chairman Thomas Jordan told shareholders at the SNB's ordinary general meeting in the capital Bern.

"In the future, regulations will have to compel banks to hold sufficient assets which they can pledge or transfer at any time without restriction, and which they can thus deliver as collateral to existing liquidity facilities," he said.

Following the collapse of three US regional lenders, Credit Suisse's share price plunged on March 15, causing the central bank to step in with a $54-billion lifeline for the second-biggest bank in Switzerland.

But investor confidence ebbed away nonetheless and the government, the SNB and the regulators FINMA strongarmed UBS, the biggest bank in the country, into a $3.25-billion takeover on March 19.

"The collapse of Credit Suisse would have sent a shockwave through the global financial system. The consequences for the real economy, both in Switzerland and abroad, would have been dramatic," said Jordan.

"A global financial and economic crisis could easily have been set in motion."

In Switzerland, the merger has raised serious concerns not only about job losses but also for domestic banking competition, especially for loans to small and medium enterprises.

Jordan insisted that the SNB would make sure competition issues were properly taken into account.

"It is important that Swiss households and businesses continue to benefit from a broad range of efficiently priced banking services," he said.

"For our monetary policy to transmit to the entire economy, interest rates on bank deposits and bank loans must respond swiftly, and strongly enough, to changes in our policy rate. The greater the competition among the banks, the more likely it is that this will occur."

Inflation in Switzerland was at 3.2 percent in the first quarter of 2023.