UBS and Credit Suisse make further progress in emergency plans – regulator

March 24, 2022

ZURICH (Reuters) – UBS and Credit Suisse have made further progress in how they would stabilise and restructure themselves in a financial crisis, Swiss financial watchdog FINMA said on Thursday.

Big Swiss banks must demonstrate how they would right themselves in the event of an emergency, or how they can be restructured or liquidated without obstacles while maintaining their systemically important functions in Switzerland.

“FINMA sees further progress in the global resolvability of the large Swiss banks Credit Suisse and UBS,” the watchdog said in a statement. “They significantly reduced obstacles to the implementation of the resolution strategy.”

FINMA also approved the recovery plans of both large banks again.

“FINMA also continues to view the Swiss emergency plans of Credit Suisse and UBS as effective,” it said.

Resolvability means creating the conditions for successfully restructuring a systemically important bank in a crisis, or allowing it to exit the market by way of bankruptcy, without jeopardising financial stability.

This is part of Switzerland’s so-called Too Big to Fail rules, aimed at reducing risks to the financial system and avoiding the need for taxpayer-funded bailouts.

FINMA said the emergency plans of the other domestically important banks – PostFinance, Raiffeisen and Zuercher Kantonbank were still not ready.

“None of the banks has reserved sufficient loss-absorbing funds for them to be recapitalised and their operations continued in a crisis,” FINMA said.

(Reporting by John Revill; Editing by Stephen Coates)