The Swiss Financial Market Supervisory Authority (FINMA) assessed the recovery and resolution plans of systemically important Swiss financial institutions. FINMA also published its annual report, which highlights the importance of prompt implementation of final Basel III regulation and notes that FINMA plans to implement enhanced liquidity requirements for systemically important banks; these liquidity requirements are set to enter into force in mid-2022 and form part of Switzerland’s “too big to fail” regulation.
The annual assessment of recovery and resolution planning of systemically important Swiss financial institutions revealed the need for further actions on the part of the banks and financial market infrastructures as well as on the part of the authorities. With respect to the financial market infrastructures, FINMA approved the recovery plans of the central counterparty SIX x-clear and the central securities depository SIX SIS for the first time subject to conditions. Additionally, FINMA saw further progress in the global resolvability of the major Swiss banks Credit Suisse and UBS and re-approved their recovery plans. However, FINMA stated that the emergency plans of the domestically oriented, systemically important banks PostFinance, Raiffeisen, and Zürcher Kantonalbank cannot be implemented, as none of these banks has reserved sufficient loss-absorbing funds to be able to be recapitalized and continued in the event of a crisis.
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Keywords: Europe, Switzerland, Banking, Basel, Liquidity Risk, Credit Suisse, Regulatory Capital, Resolution Framework, Resolution Planning, Too-Big-to-Fail, Systemic Risk, UBS, FINMA
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