ZURICH – On Wednesday, Switzerland’s financial regulator said it would regularly review how it oversees UBS Group (NYSE: UBS) as the country’s authorities prepare to overhaul regulations to make the banking sector more robust.
Laying out its strategic goals for 2025 to 2028, FINMA said it would enhance the supervision of institutions it watches and have them develop their governance and risk culture towards higher requirements and clear risk tolerance thresholds.
“The supervisory approach for UBS will be reviewed on an ongoing basis and refined as necessary so that the risks associated with its systemic importance can be countered at all times,” FINMA said in a statement.
It said it had used its supervisory instruments intensively in the past, including on-site inspections, stress tests, and stabilization and resolution planning, but with the enlarged UBS, Switzerland was particularly exposed.
“This means that the supervisory authority must be able to intervene quickly and at an early stage,” a spokesperson said. “The new instruments we are calling for would further strengthen our supervision of UBS.”
In April, the Swiss government pitched a series of proposals aimed at tightening banking sector regulations following the 2023 collapse of Credit Suisse and its subsequent takeover by its long-time rival UBS.
Among the proposals floated were extra powers for FINMA, but authorities have yet to determine how far-reaching the new regulations should be. That process is expected to extend well into next year.
The government said it would in the first half of 2025 make an announcement on the supervisory instruments FINMA has as part of the follow-up to those proposals.
UBS Group (NYSE: UBS) and Switzerland’s three other systemically important banks – Raiffeisen Group, PostFinance, and Zuercher Kantonalbank – must be capable of being restructured, wound up, or sold off, without jeopardizing Swiss and international financial stability, FINMA said.
Last month FINMA said UBS must improve its emergency and recovery plans following its takeover of Credit Suisse to ensure it can be wound down or sold without risking financial stability and taxpayer cash.
FINMA has been appealing for stronger powers to oversee banks, including the authority to name and shame banks that breach its rules, as well as issue fines.
The government said it would take into account the findings of a parliamentary report into how the Credit Suisse crisis was handled when determining banking regulations, it added. The report is expected to be published in the next few weeks.
