The Swiss Financial Market Supervisory Authority FINMA today published its annual assessment of recovery and resolution planning by the systemically important Swiss financial institutions and noted further progress in the work: for the first time all domestic systemically important banks (PostFinance, Raiffeisen and Zürcher Kantonalbank) have credible resolution strategies. The two large banks (Credit Suisse and UBS) have made further improvements to their global resolvability.
Systemically important Swiss financial institutions must show in their recovery and resolution planning how they would stabilise themselves in a crisis or how they can be restructured or liquidated without obstacles, while maintaining their Swiss systemically important functions. FINMA publishes an annual assessment of the progress of this work. This creates transparency about the status of the “too big to fail” work by the global systemically important banks Credit Suisse, UBS, the domestic systemically important banks PostFinance, Raiffeisen and Zürcher Kantonalbank as well as the systemically important financial market infrastructures SIX x-clear and SIX SIS.
Credible resolution strategies from PostFinance, Raiffeisen and Zürcher Kantonalbank –gaps in effectiveness
PostFinance, Raiffeisen and Zürcher Kantonalbank have improved their emergency planning significantly since 2019. For the first time they all have a credible resolution strategy. However, further steps needed for the emergency plans to be effective include the build-up of the loss-absorbing capacity required for recapitalisation in a crisis, in the case of PostFinance also the development of an alternative strategy.
UBS and Credit Suisse have improved their global resolvability – work still to be done
FINMA continues to regard the Swiss emergency plans of the global systemically important banks UBS and Credit Suisse as effective, although UBS's approval remains subject to the proviso that it continues to reduce certain financial interdependencies within the group according to the agreed schedule. The large banks were also able to achieve further progress in their global resolvability, by building up the necessary capabilities or removing obstacles to the implementation of the resolution strategy.
To achieve global resolvability, regulatory and supervisory requirements are still to be developed or finalised on the part of authorities, particularly in the area of liquidity.
In 2020 FINMA approved the recovery plans of the systemically important banks as at the end of 2019.
Financial market infrastructures have improved their recovery plans – preferred resolution strategy for SIX x-clear defined
The recovery plans for the systemically important financial market infrastructures SIX x-clear and SIX SIS have improved since 2019, but do not yet meet the high requirements for approval. FINMA has defined its preferred resolution strategy for the central counterparty SIX x-clear. In this context, a temporary continuation of the system-critical functions during a complete wind-down of business activity are envisaged.
Status as at the end of 2020
Background information about Switzerland’s “too big to fail” regime
FINMA provides detailed information about the “too big to fail” regulation in Switzerland, about its role as a resolution authority and the procedure for assessing resolvability, and about investor and client protection in the Swiss financial centre.
Tobias Lux, Media Spokesperson
Phone +41 31 327 91 71
Vinzenz Mathys, Media Spokesperson
Tel. +41 31 327 19 77