FINMAs report on evaluation of emergency plans for the banks

All five Swiss system banks were required to provide FINMA with recovery plans, and two of them also had domestic emergency plans. The project by Credit Suisse is very effective. Concerning UBS, it is mentioned that the plan in emergency proposed by the bank is quite effective, but some obligations seem excessive.

For the three other domestic systemically important banks, FINMA recognized the existing plans as ineffective. Their development goes through different stages. Zürcher Kantonalbank has a realistic plan for the further development of capital and liquidity resources in times of crisis. Raiffeisen and PostFinance have not yet developed a realistic plan that allows to create an effective plan in case of emergency.

The FINMA report acknowledged that two Swiss banks have taken important preparatory steps to successfully implement plans for emergency. In particular, they fulfilled the requirements for structural separation. For example, they have created holding structures and Swiss subsidiaries to facilitate this process.

Banks have to continue to work on their plans, which is largely complicated by the lack of published regulatory requirements. The almost complete absence of systemically important Swiss banks' foreign business reduces the effect of settlement plans exclusively to systemically significant functions in Switzerland. Under such conditions, activity of supervisor is vital. FINMA announced its readiness to provide major banks with a discount on capital requirements, provided that they implement the necessary measures.

FINMA noted the improvements that occurred in 2019. Therefore, Credit Suisse was able to take advantage of 40% of the maximum possible discount, and UBS - 42.5%.