FINMA published the annual report for 2020 as well as an annual assessment of the recovery and resolution planning by the systemically important financial institutions in the country. The assessment reveals that, for the first time, all domestic systemically important banks or D-SIBs (PostFinance, Raiffeisen, and Zürcher Kantonalbank) have credible resolution strategies. However, further steps needed for the emergency plans to be effective include the build-up of the loss-absorbing capacity required for recapitalization in a crisis; this also includes the development of an alternative strategy in the case of PostFinance. The two global systemically important banks (or G-SIBs), Credit Suisse and UBS, also improved their global resolvability.
The assessment showed that measures to recapitalize and continue the banking business of Zürcher Kantonalbank, Raiffeisen, and PostFinance differ on a number of points and there are still gaps in implementation. All the three domestically focused banks meet the special liquidity requirements defined by FINMA for a credible emergency plan and have closed gaps with regard to operational dependencies, specifically in the area of access to financial market infrastructures. For UBS and Credit Suisse, FINMA continues to regard the Swiss emergency plans 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; these two large banks were 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. In 2020, FINMA approved the recovery plans of the systemically important banks as at the end of 2019. Finally, FINMA concluded that the systemically important financial market infrastructure entities (SIX x-clear and SIX SIS) do not not meet all the requirements for approval. To achieve global resolvability, regulatory and supervisory requirements are still to be developed or finalized on the part of authorities, particularly in the area of liquidity.
- Press Release on Annual Assessments
- Assessment of D-SIBs
- Assessment of G-SIBs
- Assessment of FMIs
- Press Release on Annual Report
Keywords: Europe, Switzerland, Banking, Basel, D-SIBs, FMI, Annual Report, Recovery and Resolution Planning, Resolution Framework, G-SIBs, Systemic Risk, FINMA
Previous ArticleFED Issues Update on Bank Dividend and Share Repurchase Restrictions
Next ArticleHKMA Launches Global Challenge for Regtech Providers
The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) proposed to amend the supervisory statement on supervision of run-off undertakings that are subject to Solvency II regulation.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.