Swiss Federal Council Amends Capital Adequacy Ordinance
The Federal Council of Switzerland adopted amendments to the Capital Adequacy Ordinance. The amendments introduce simplifications in the capital and liquidity requirements for certain small banks and securities firms and will ensure that the parent entities of systemically important banks are sufficiently well-capitalized in the event of a crisis. The amendments become effective from January 01, 2020.
The amendments to the Ordinance simplify the capital and liquidity requirements for small, particularly liquid and well-capitalized Category 4 and Category 5 banks and securities firm. Furthermore, the changes aim to ensure the availability of sufficient gone-concern capital, particularly for parent banks and in the Swiss units that perform systemically important functions. Gone-concern requirements are intended to ensure that a systemically important bank in difficulty can be restructured and wound up in an orderly manner without financial assistance from the state. The Federal Council had already introduced gone-concern capital requirements for UBS and Credit Suisse at consolidated group level in 2016. Since January 01, 2019, such requirements have also been in force to a reduced extent for the domestically focused systemically important banks (PostFinance AG, Raiffeisen, and Zürcher Kantonalbank).
Additionally, the Swiss Federal Council has decided not to implement the proposed increase in capital requirements for mortgages on residential investment property, as it considers the proposed self-regulation regime of the Swiss Bankers Association to be effective and appropriate.
Related Links
- Press Release
- Capital Adequacy Ordinance (PDF in German)
- Explanation (PDF in German)
Keywords: Europe, Switzerland, Banking, Securities, Own Funds, Capital Adequacy Ordinance, Gone-Concern Capital, Small Banks, Resolution Framework, Systemic Risk, Proportionality, Swiss Federal Council
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Trevor Howes
IFRS 17 technical advisor; AXIS actuarial modeling system expert; extensive experience in life insurance and life reinsurance, with focus on modeling, valuation, and financial reporting
Previous Article
CBO Releases Financial Stability Report for 2019Related Articles
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
APRA Finalizes Guidance for New Prudential Standard on Remuneration
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
OCC Updated LIBOR Self-Assessment Tool for Banks
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
TCFD Updates Guidance for Financial Disclosures on Climate Risk
The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
BCBS Report Examines Progress on Adoption of Basel III Framework
The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.
ACPR Implements Updates Related to DPM Version 3.1
The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.
EBA Note Examines Transition Risks of Benchmark Rates
The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.
