The Swiss National Bank (SNB) published several reporting updates related to counterparty risk, interest rate risk, value adjustments and provisions for default risks, and supervisory reporting for annual and semi-annual financial statements in banking sector. The Swiss Financial Market Supervisory Authority FINMA provided information about the basis for writing down additional tier 1 (AT1) capital instruments and published the annual assessment of recovery and resolution planning by systemically important Swiss financial institutions for the 2022 reporting period. Finally, the Swiss Federal Council approved the national cybersecurity strategy.
The new cybersecurity strategy builds on the work of the first two strategies, adding content and precision where necessary. Overall, the strategy defines 17 measures, each of which contributes to the five strategic objectives of "empowerment," "secure digital services and infrastructures," "effective detection, prevention, management and defense against cyber incidents," "effective prosecution of cybercrime," and "leading role in international cooperation." The strategy was prepared with the involvement of over a hundred experts from the cantons, the business community, universities, society, and the federal government. It is no longer limited in time, but it will be updated if the environment or the political framework changes. In addition, the National Cybersecurity Centre (NCSC) will continue to perform a fundamental review every five years, to ascertain whether the strategy sets out the right objectives and measures, or whether adjustments are necessary. A steering committee will oversee the implementation of the new cyber strategy and draw up an implementation plan for the measures in consultation with the key players.
The resolution planning assessment by FINMA reviewed the progress made in recovery and resolution planning by the systemically important banks Credit Suisse, UBS, PostFinance, Raiffeisen and Zürcher Kantonalbank and the systemically important financial market infrastructures SIX x-clear and SIX SIS. Credit Suisse and UBS carried out further work towards achieving global resolvability in 2022. FINMA continued to view the Swiss emergency plans of Credit Suisse and UBS as ready to implement. For the first time, Raiffeisen’s emergency plan meets the requirements for the uninterrupted continuation of systemically important functions if the bank were to be at risk of insolvency. As at the end of 2022, Raiffeisen has reserved sufficient capital for recapitalization and continuing operations in a crisis. The emergency plan for Zürcher Kantonalbank (ZKB) is still not ready to implement because it does not currently have sufficient capital reserved for the event of a crisis. However, it has begun to build up the corresponding funds by issuing bail-in instruments. In contrast, PostFinance’s plan to provide the necessary funds in an emergency by means of a recapitalization guarantee by the federal government has been rendered obsolete. Parliament did not accept the Federal Council’s proposals concerning the amendment of the Post Organization Act and the Federal Decree on the recapitalization guarantee to Swiss Post. The bank must therefore revise its emergency plan. The resolution report, however, does not take account of subsequent events, in particular the merger of UBS and Credit Suisse.
Keywords: Europe, Switzerland, Banking, Basel, Resolution Framework, Resolution Planning, Regulatory Capital, Reporting, IRRBB, Counterparty Credit Risk, Cyber Risk, Operational Resilience, SNB, FINMA, Swiss Federal Council
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