These Swiss banks need to thrive

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The Swiss Financial Market Supervisory Authority (Finma) has released its annual shortfall report. He takes a close look at the contingency plans of Switzerland’s largest financial institutions.

However, Finma emphasizes that the merger of UBS and CS was not included in the report. Because the report points to the end of 2022. Switzerland’s major banks submitted their emergency planning documents mid-year.

In general, Swiss financial institutions have further developed their contingency plans. There have been operational advances in global solubility. Solvability is the creation of the necessary conditions for a systemically important bank to be restructured in the event of a crisis or to exit the market by bankruptcy.

Contingency plan cannot be implemented

Still, some Swiss banks’ contingency plans did not satisfy Finma. There are bad marks for:

• Postfinance (red)
• ZKB (orange)

The Swiss Postfinance contingency plan has classified Finma as red. Meaning: “No reasonable plan to ensure sales viability.” Postfinance boss Hansruedi Köng (57) doesn’t take it very seriously, as he said in an interview with “Finanz und Wirtschaft”.

ZKB’s Swiss contingency plan is also considered sensitive. But the rating is orange because it’s a “reasonable plan.”

Raiffeisen reported a success. Your emergency plan meets the requirements for the first time and is therefore classified as green, which means it can be implemented.

However, a look at CS is surprising. Finma also approved the contingency plan by the end of 2022. That is, just before the emergency merger on March 19.

“The events surrounding Credit Suisse show how important it is to make concrete preparations for crises,” Finma director Urban Angehrn (58) said in a statement. “At the same time, it is clear that there are important lessons to be learned from the Credit Suisse crisis for future crisis preparations. Finma will do its part to make that happen.”

Cheers to UBS

Like CS, UBS gets good grades. The recovery plan has already been approved by all banks. This plan shows how the bank plans to stabilize itself in the event of a crisis. Bad marks from Postfinance and ZKB relate to the Swiss contingency plan. It is about how banks want to maintain systemically important functions such as payment transactions if there is a risk of bankruptcy.

In addition to the five systemically important banks, Finma also rated two systemically important FMIs, SIX x-clear and SIX SIS. These are two SIX companies that operate the infrastructure of the Swiss financial center. Finma has approved recovery plans for both companies.

Source :Blick