ZURICH, June 20 (Reuters) -

Weaknesses in the Swiss financial regulatory framework persist following the 2023 collapse of Credit Suisse and must be addressed, the Swiss National Bank said on Thursday.

In a state-backed rescue, Credit Suisse was absorbed by its longtime rival UBS in 2023. Concerns that the enlarged lender posed risks for the economy prompted the government to propose tougher regulations for banks deemed "too big to fail" in April.

At the heart of the plan were proposals to have UBS hold more capital, but they still face a long political process.

In its annual financial stability report, the SNB said it shared the governing Federal Council's view on the need for action on capital requirements, liquidity requirements, early intervention, and recovery and resolution planning.

"The current capitalisation of the combined UBS parent bank is stronger than that of the Credit Suisse parent bank before the crisis. Still, the weaknesses of the current regime remain and should be addressed," the central bank said.

The SNB also backed a review of the liquidity coverage ratio, a key measure to gauge a bank's ability to meet its cash demands, after the outflows of retail deposits during the Credit Suisse crisis were larger and faster than the ratio assumed.

On Wednesday, Switzerland's financial regulator said that the UBS takeover of Credit Suisse did not create any competition concerns, despite recommendations from the country's antitrust watchdog that it merited further scrutiny. (Reporting by Miranda Murray and Ludwig Burger Writing by Dave Graham)