LONDON, April 10 (Reuters) - Switzerland called on

Wednesday for changes to global measures to prevent liquidity

crunches which were introduced after the global financial

crisis, to make bank runs less calamitous.

A year after the collapse of Credit Suisse, which was bought

by UBS in an emergency rescue, Swiss officials and

regulators are examining how to change liquidity rules to make

banking deposits more stable and avoid bank runs.

The Swiss government said in a report on how to regulate

banks deemed "too big to fail" (TBTF) that liquidity

requirements should be addressed internationally.

It said the liquidity coverage ratio (LCR), a key measure to

gauge a bank's ability to meet its cash demands, should be

reviewed and banks should be allowed to fall below the current

minimum that regulators globally have agreed.

While regulators in Europe and the U.S. are looking into

whether LCRs are fit for purpose, the Swiss call gives the most

detailed insight into what supervisors are thinking since the

collapse of Credit Suisse in March 2023.

Switzerland's then second-largest bank saw billions of Swiss

francs in deposits exit in a matter of days, burning through

what had appeared to be comfortable cash buffers.

In Europe, banks must hold a minimum LCR of 100%, even when

depositors and creditors are withdrawing cash, but the Swiss

government said a "flexible use" in which the ratio falls below

this level should be possible in such a crisis.

"The Credit Suisse crisis has shown that it was unrealistic

for the LCR to fall below 100% due to the associated stigma and

that as a result, the buffer function of this ratio could not

come into effect," it said in its report, the recommendations of

which are subject to parliamentary approval and could change.

The requirement of 100% should be "divided into a buffer

portion that is explicitly possible to fall below and a minimum

requirement that must be met at all times," it added.

Credit Suisse believed that its LCR should not fall below

100% because this could have signalled to the market it was

facing serious liquidity issues, the report added.

European regulators are also debating whether to shorten the

period of acute stress - from 30 days to 5 or 10 days - to

measure the buffers banks need over shorter time frames, because

bank runs can happen faster today, Reuters reported in March.

Liquidity rule changes are also being debated in the U.S.

DEPOSITS

Switzerland's government also said lenders could move a

greater portion of client deposits into longer-term saving

products with higher yields, to help make deposits more stable.

Credit Suisse held a large portion of sight and short notice

period deposits which enabled rapid withdrawals, it said.

Banks could be encouraged to hike interest rates and

"motivate customers to make long-term savings or term deposits

rather than sight deposits", the report said. To facilitate

this, lenders' LCRs could take into consideration the portion of

their funding that is short term.

Reuters reported in November that rewarding clients who tie

up their savings for longer with higher rates was an option

Swiss officials had debated as they drew up new rules.