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.
Keywords: Europe, Switzerland, Banking, Securities, Own Funds, Capital Adequacy Ordinance, Gone-Concern Capital, Small Banks, Resolution Framework, Systemic Risk, Proportionality, Swiss Federal Council
APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.
ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.
FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.
ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.