The revision of the Credit Suisse crisis has shown that the too big to fail the regime must improve in order to reduce the risks to the state, taxpayers and the economy.
For this reason, during its meeting on 6 June 2025, the Swiss Federal Council specified the parameters for the corresponding amendments to acts and provisions, which will be submitted for consultation in stages from this autumn and afterwards. These include stricter capital requirements for systematically important banks with foreign subsidiaries, additional requirements for the recovery and resolution of systematically important banks, the introduction of a regime of senior banks and additional powers for the Swiss financial market (FINMA).
The Federal Council has also opened a consultation process for measures to be implemented directly at the decree level.
The introduction of the status of senior executives should further enhance prevention. Banks must specify in a document responsible for decisions in a bank. In the event of abuse, this makes it possible to clearly assign and therefore to impose targeted sanctions, e.g. By enjoying the variable remuneration already paid, the cancellation or reduction of detailed bonuses that have not yet been paid (see the additional burden should be minimal for banks with a simple structure.
In addition, the Federal Council has decided to increase the ability to acquire liquidity through SNB. Legal simplifications at legislative level must be drawn up in terms of collateral for banks to SNB. The rules must be introduced at the decree level requiring banks to prepare collateral to acquire liquidity from SNB and other central banks. For systematically important banks, this must be based on a quantitative minimum requirement.
Finma’s supervisory powers are going to expand. FINMA should be able to order measures earlier and more effectively (early intervention). It should also be able to issue financial penalties (fines) in non -compliant institutions.
In addition, the requirements for recovery and resolution plans must be increased. FINMA should now be able to order measures to address recovery shortages. Solving options must also be extended and guaranteed by law.
Currently, Swiss banks must only provide partial capital support for foreign subsidiaries. If these subsidiaries lose value, this also reduces the parent’s CET1 capital that was not intended for subsidiaries. Therefore, this CET1 chapter is not available to cover the risks arising from the operating activities of the parent bank.
In the Credit Suisse crisis, this meant that an important measure of crisis management, that is, the sale of certain business areas, could not be consistent. This is due to the fact that the Swiss Parent Bank would not meet capital requirements. As a result, Credit Suisse’s strategic room for maneuver was severely limited. This would also be problematic for other systematically important banks in crisis.
Therefore, the Federal Council has proposed that, in the future, systematically important banks should completely remove the transfer of value of external subsidiaries (entries) from the parent bank’s CET1 capital (see Factsheet for capital requirements). This approach also corresponds to the evaluation of the Swiss National Bank (SNB) and the Finma on the capitalization of maternal banks. It ensures that the valuation losses in foreign subsidiaries in the parent bank balance sheet will not affect CET1 capital.
At the same time, the measure enhances the capitalization of the parent bank as the Swiss entity within the structure of the group. On the contrary, as stated in its report on banking stability, the Federal Council avoided measures to generally increase capital requirements, which it considers to be less appropriate.
The Federal Council has already opened an initial consultation on the measures at the decree level. For capital requirements, the stricter provisions must apply to the assessment of assets that are not sufficiently recoverable in crisis, for example capitalized software or deferred tax assets. The duration and suspension of interest payments for AT1 Capital Instruments must also be specified in more detail.
The consultation process is also used to adjust liquidity requirements. In order for the Finma and the Authorities to be able to evaluate the situation of banks in a liquidity crisis at any time, the banks concerned should provide complete and updated analyzes of information and scripts immediately in the future.
The measures adopted by the Federal Council at the Legislative and Decree level are also aimed at analogy. They enhance confidence in the Financial Center, which, in the opinion of the Federal Council, is central to its stability and competitiveness.
For legislative amendments, the Federal Council will present consultations based on these parameters in the second half of 2025 and in the first half of 2026.
In addition, the consultation on the amendments to the liquidity decree in the first half of 2026 will open, with the aim of implementing the new quantitative minimum requirement to obtain liquidity through SNB and other central banks.
A consultation on the measures already submitted at the decree level will be held with stakeholders until September 29, 2025.