FINMA, the Swiss financial regulator, is opening a consultation on solving the shortcomings in the trading business, the securitisation of banks and the fragility of the interbank market, the regulator said.

FINMA intends to address these issues based on new standards of the Basel Committee and the European Union.

The consultation is being conducted in agreement with the State Secretariat for International Financial Matters, which at the same time is also holding a consultation on amending the Capital Adequacy Ordinance. Both consultations end on 20 August 2010.

With this proposed reform package, the supervisory authority aims to achieve a significant and sustainable improvement in risk-oriented capital adequacy in those areas that generated the largest losses during the financial crisis, it said in a statement. It will also focus on improving interbank market regulations.

The changes will affect the country's big banks the most, the regulator said. However, the changes are applicable to all financial institutions; they are not a result of the too big to fail debate, which concerns the danger the failure of banks such as UBS may have on the Swiss economy.

The regulation resulting from the consultation will come into force on 1 January 2011.