FINMA Evaluates Recovery and Resolution Plans of Systemic Entities
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
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Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
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