Swiss Finance Minister Karin Keller-Sutter has expressed concerns over the high levels of debt in the United States and Europe, likening them to a “time bomb” that could lead to significant financial instability. In an interview with the Financial Times, Keller-Sutter emphasized the need for a more sustainable approach to debt management, citing the recent collapse of Credit Suisse as a warning sign of the risks associated with high debt levels.

Keller-Sutter highlighted the importance of maintaining a strong financial system, particularly for banks deemed “too big to fail.” She noted that the Swiss government has taken steps to ensure that systemically important banks have sufficient equity to withstand crises, including the requirement for up to 100% equity backing of foreign subsidiaries. This move aims to prevent the kind of financial contagion seen in the Credit Suisse crisis, where the bank’s collapse led to its takeover by UBS.

The Swiss finance minister also discussed the need for international cooperation to address the debt issue. She emphasized that the United States, in particular, faces significant challenges due to its high levels of debt. Keller-Sutter suggested that the U.S. and European authorities should work together to develop more effective strategies for managing debt and preventing future financial crises.

Overall, Keller-Sutter’s comments underscore the urgency of addressing debt levels in the global financial system to mitigate the risks of future economic instability.