After its acquisition of Credit Suisse The Swiss financial supervisory authority, FINMA, said it plans to conduct 40 reviews of UBS and conduct two stress tests this year. The Swiss financial supervisory authority, FINMA, said on Wednesday that it plans to conduct 40 reviews of UBS and conduct two stress tests this year on the bank, after its acquisition of its competitor, Credit Suisse, in 2023, which led to… Increasing concerns about “too big to fail” lenders.
FINMA outlined plans to monitor the last Swiss bank of global systemic importance in its annual report for 2023, as the regulator renewed its calls for greater powers, according to Reuters. “There are 40 on-site supervisory reviews scheduled for UBS in Switzerland and abroad, in addition to two in-depth stress tests, this year,” said Thomas Hirschi, head of the banking department at FINMA. The supervisory authority indicated that its activities focus on the risks that come from the merger of UBS with its former competitor, Credit Suisse, including operational stability.
“Finma” said that it is also focusing on capital and liquidity planning for the combined bank, and that the recovery and emergency plan for UBS Bank after the merger will be critically reviewed. The regulator was criticized for its supervision of Credit Suisse, and defended its role in the collapse that ultimately led to the largest bank rescue operation since the 2008-2009 global financial crisis. FINMA said it believes the additional tools will enable it to carry out its supervisory and executive tasks more consistently.
In its assessment of the sector, FINMA identified a number of serious deficiencies, particularly in the areas of money laundering, mortgage lending, and cyber risks. It urged the concerned banks to address this shortcoming without delay. On Tuesday, the Swiss Central Bank called for a comprehensive overhaul of banking capital regulations, saying that Switzerland needs rules that recognize that UBS has become a more systemically important bank after its acquisition of Credit Suisse.
The Swiss Central Bank said that the financial positions of banks need to be strengthened to avoid future crises, noting that it is important to prepare a wide range of options to resolve the important bank of systemic importance. FINMA, which also supervises insurance companies, fund managers, and financial technology companies, said it conducted 732 investigations and completed 27 procedures against companies and individuals during 2023. Regarding banking supervision, the authority said that it conducted 96 on-site supervisory reviews last year, including 57 longer supervisory reviews and 39 in-depth reviews.