Featured Product

    FINMA Identifies Key Risks in the Financial Sector in Switzerland

    December 10, 2019

    FINMA published the first issue of Risk Monitor. This publication provides an overview of the most important risks facing supervised institutions over a time horizon of up to three years. Going forward, each issue of this publication will highlight one selected trend with the potential to substantially impact the Swiss financial market over the long term. The report will also cover the focus of the supervisory activity of FINMA on the basis of the identified risks. This issue discusses the financial risks arising from climate change as one of the most important long-term risks identified by FINMA.

    The six principal risks identified by FINMA for its supervised institutions and the Swiss financial center are the persistent low interest-rate environment, a possible correction on the real estate and mortgage market (especially in the investment property segment), cyber risk, a disorderly cessation of LIBOR benchmark interest rates, money laundering, and increased impediments to the cross-border market access, particularly in EU. Besides the risks highlighted in this issue, FINMA deals with numerous other risks in its supervisory work. FINMA plans to focus supervision on the key risks identified earlier, including the following. 

    • With respect to the banking sector and the real estate and mortgage market, FINMA will focus on developments in the buy-to-let market. For insurers, FINMA will conduct a stress test to gain an insight into the impact of properties and mortgages held in investment portfolios on the solvency of insurance companies. Furthermore, FINMA will analyze the external valuation procedures of insurance companies to value properties for potential modeling risks.
    • On cyber risks, FINMA will therefore focus above all on improvements to the crisis management toolkits of supervised financial institutions and their stakeholder groups. FINMA will also provide an active input to the cross-institutional supervisory coordination platform for combating cyber-attacks.
    • With regard to the impending abolition of LIBOR benchmark interest rates, FINMA will continue to work to ensure that supervised financial institutions are well-prepared for the replacement of LIBOR and engage in discussions on this issue with the national working group and relevant authorities. FINMA will focus on ensuring that, where possible, no new contracts or products refer to these benchmark interest rates if the term of the contract in question extends beyond the terminal LIBOR date and fallback clauses or other suitable legal provisions have not been included in these contracts. FINMA is also working on the replacement of LIBOR in the Swiss Solvency Test or SST.


    Related Links

    Keywords: Europe, Switzerland, Banking, Insurance, Securities, Risk Monitor, Cyber Risk, Climate Change Risk, Credit Risk, Interest Rate Risk, Benchmark Reforms, Stress Testing, FINMA

    Featured Experts
    Related Articles
    News

    APRA Issues Interim Update to Policy Priorities for 2021 and Beyond

    In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.

    September 24, 2021 WebPage Regulatory News
    News

    EC Adopts Solvency II and Resolution Rules Package for Insurers

    The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.

    September 22, 2021 WebPage Regulatory News
    News

    OCC Issues Booklets on Regulatory Reporting and Earnings

    The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.

    September 22, 2021 WebPage Regulatory News
    News

    ECB Sets Out Results of Economy-Wide Climate Stress Tests

    The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.

    September 22, 2021 WebPage Regulatory News
    News

    EBA Examines Implications of Increasing Use of Digital Platforms in EU

    The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.

    September 21, 2021 WebPage Regulatory News
    News

    HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact

    The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.

    September 21, 2021 WebPage Regulatory News
    News

    ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures

    The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.

    September 21, 2021 WebPage Regulatory News
    News

    BIS Quarterly Review Discusses Developments in Fintech and ESG Space

    BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.

    September 20, 2021 WebPage Regulatory News
    News

    BCBS to Consult on Supervisory Practices for Climate Risks by Year-End

    The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards

    September 20, 2021 WebPage Regulatory News
    News

    OCC Identifies Operational Risk Deficiencies in MUFG Union Bank

    The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.

    September 20, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7494