Postfinance has to raise its own funds

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Postfinance has to raise its own funds at the behest of the Financial Market Authority (Finma). The Federal Administrative Court dismissed the financial institution’s appeal against the relevant decision of the Financial Market Authority.

In its annual report dated March 27, FINMA evaluated the contingency plans of the systemically important banks Postfinance and Zürcher Kantonalbank (ZKB) as “inoperable”. In an emergency, Postfinance could previously count on a capital injection from the federal government, but that option was no longer available due to the rejected revision of the Postal Service Act. The bank should therefore develop a new contingency strategy.

According to Finma, Postfinance has not allocated sufficient capital to ensure that systemically important parts continue in a “dying scenario”. Therefore, it needs to increase its own capital.

it’s all about it

Finm) ordered a stock surcharge for Postfinance in July 2021. Otherwise, sufficient coverage will not be available for the risks taken by Postfinance. The Federal Administrative Court decision, released on Thursday, does not reveal how high the amount was, as the number was anonymized.

However, it is over 270 million francs, as Postfinance criticizes in the current decision. Finma demanded the same in her first decision on the same issue. However, the Federal Supreme Court overturned this decision and sent the matter back to Finma for further consideration. This was because Finma’s management made the decision. However, since this is a very important issue, it was up to the Board of Directors to decide.

The Federal Administrative Court dismissed all of Postfinance’s complaints. The company criticized the method of calculating the increased interest rate risks for Finma. This has no legal basis and the method contradicts international standards.

The Federal Administrative Court does not endorse this view. It sheds light on the criteria used in a detailed assessment and Finma’s approach. Therefore, it considers that the additional equity to be provided is legitimate.

Postfinance is a private law subsidiary of Swiss Post. In June 2015, the Swiss National Bank classified it as systemically important. The official state guarantee expired at the end of September 2017. Parliament rejected privatization last fall.

In accordance with the Postal Organization Law to which Postfinance is subject, loans or mortgages to third parties are not allowed. Its legal mandate is to provide basic payment services nationwide.

The current decision has not been finalized yet. It can be brought to federal court. (SDA/rae)

Source :Blick