FINMA steps up supervision of UBS after CS takeover
Published: Wednesday, Mar 20th 2024, 15:52
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The Swiss Financial Market Supervisory Authority FINMA has expanded its supervision of the big banks following the takeover of Credit Suisse by UBS. However, the authority is also calling for a strengthening of the legal basis and additional instruments for its tasks.
At the same time, Finma wants to make greater use of its discretionary powers with its existing instruments in its supervisory activities "in light of the historic events surrounding Credit Suisse", said Marlene Amstad, Chair of the Board of Directors of Finma, at the authority's annual media conference in Bern on Wednesday. She mentioned, for example, the requirements for liquidity and the institutions' stabilization plans.
Capital accumulation at UBS
At the annual media conference, Thomas Hirschi, Head of the Banks division, did not want to put a figure on how much the liquidity requirements have now increased for the only remaining big bank, UBS. However, he emphasized that the additional liquidity requirements for the merged big bank are "significantly higher" than before.
The combined big bank will also have to expect significantly higher capital requirements by 2030. How high these will be will depend not least on the size of the bank and its systemic importance at that time. "But it will be a significant increase in capital." UBS will begin this from 2026.
Controls and stress tests
Following the merger of UBS and CS, FINMA has merged and expanded its existing big bank supervision teams, as was reported at the media conference. Currently, around 60 full-time positions at FINMA are directly and indirectly involved with UBS, Hirschi explained.
In the current year, the authority has planned 40 on-site inspections at UBS's big bank, whereby it is also working together with the local supervisory authorities abroad. "Almost every week, somewhere in the world, a Finma team is dealing with a UBS division," emphasized Hirschi. Two stress tests are also planned.
International exception
Speaking to the media, the Chairwoman of FINMA once again emphasized that the authority also needs new instruments for its activities. The focus here is on the "senior management regime" - i.e. clear responsibilities of certain bank managers for individual transactions - as well as the authority to impose fines. In addition, FINMA would like to be able to communicate publicly about completed proceedings. Internationally, Finma is the clear exception with its lack of authority to impose fines, emphasized the President.
While the "senior management regime" has also met with general approval from bank representatives in recent months, Finma's demand for the authority to impose fines could have a much harder time: The Bankers Association recently signaled its clear rejection of the proposal.
Over 700 enforcement investigations
In total, Finma carried out 732 enforcement investigations last year (previous year 850) and concluded 27 proceedings against companies or individuals. Amstad emphasized that the vast majority of proceedings were generally successful: "In over 90 percent of cases, compliance is restored within three months."
In addition, the authority carried out a total of 96 on-site inspections at Swiss banks in 2023 (previous year: 113 inspections). Insurance companies were also inspected: A total of 51 (previous year 50) on-site inspections were carried out. The focus among insurers was on the areas of life insurance, money laundering and cyber risks.
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