November 21, 2018

Federal Council of Switzerland adopted an amendment to the Capital Adequacy Ordinance. Based on the amendment, the three domestically focused systemically important banks—PostFinance AG, Raiffeisen, and Zürcher Kantonalbank—will have to hold gone concern capital for their possible restructuring and resolution, from January 01, 2019.

Following the introduction of gone concern capital requirements for UBS and Credit Suisse back in 2016, these will now apply also to the domestically focused systemically important banks (PostFinance AG, Raiffeisen and Zürcher Kantonalbank). The level of the new requirements reflects the going concern capital requirements already in force, which ensure the continuation of business activities in the event of major losses. Unlike for the big banks, however, only 40% of the requirements are reflected, as the domestically focused banks are less interconnected internationally.

The revision of the Capital Adequacy Ordinance will provide the opportunity to adjust the provisions on the treatment of systemically important banks' stakes in their subsidiaries. The previous deduction from capital will be replaced with a risk-weighting. Moreover, group companies that provide services necessary for the continuation of a bank's business processes will now be subject to consolidated supervision by FINMA. In the first half of 2019, the Federal Council will decide which institutions within a financial group have to meet the requirements for systemically important banks and particularly how the gone concern capital requirements for the Swiss units of the big banks should be structured.


Related Links

Keywords: Europe, Switzerland, Banking, Gone Concern Capital, D-SIB, Capital Adequacy Ordinance, Orderly Resolution, Swiss Federal Council

Related Articles
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
News

US Agencies Delay Enforcing Volcker Rule Restrictions on Foreign Funds

US Agencies (FDIC, FED, and OCC) announced that they will not take action related to restrictions under the Volcker Rule for certain foreign funds for an additional two years.

July 17, 2019 WebPage Regulatory News
News

SRB Announces SRF Receives Cash Injection, Grows to EUR 33 billion

SRB announced that the Single Resolution Fund (SRF or the Fund) received a cash injection of EUR 7.8 billion from 3,186 institutions in 2019, bringing the total amount in the Fund to about EUR 33 billion.

July 17, 2019 WebPage Regulatory News
News

FASB to Propose to Delay CECL Compliance Deadline for Certain Entities

FASB published a summary of the tentative decisions taken at its Board meeting in July 2019.

July 17, 2019 WebPage Regulatory News
News

IMF Publishes Report on 2019 Article IV Consultation with Vietnam

IMF published its staff report in context of the 2019 Article IV consultation with Vietnam.

July 16, 2019 WebPage Regulatory News
News

European Parliament Elects Next President of European Commission

European Parliament elected Ursula von der Leyen from Germany as the first female President of the next European Commission for a five-year term from November 01, 2019.

July 16, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3476