The Swiss Financial Market Supervisory Authority (FINMA) has completed its annual assessment of the emergency and recovery plans of domestic systemically important banks PostFinance, Raiffeisen and ZKB.
The ZKB emergency plan was deemed ready to be implemented for the first time.
Systemically important banks must submit a contingency plan to FINMA for assessment annually in which they show how they would maintain their systemically important operations if they faced a risk of insolvency. Systemically important functions are short-term lending businesses (Raiffeisen and ZKB) as well as deposit operations and payment transactions (PostFinance, Raiffeisen and ZKB).
FINMA was able to confirm that ZKB’s contingency plan is ready to be implemented for the first time, as ZKB issued the necessary additional loss-absorbing funds in the form of loss-making bonds in 2023. The other requirements had already been met.
FINMA still considers that PostFinance’s contingency plan is not ready to be implemented. PostFinance still does not meet the requirements regarding additional loss-absorbing funds, but has now submitted a binding plan to raise these funds.
Raiffeisen’s contingency plan was already deemed ready to be implemented for the first time last year, and this is still the case.
Systemically important banks must submit a recovery plan to FINMA for approval annually showing how they could be stabilized on a sustainable basis and without government intervention in the event of destabilization. As in the previous year, FINMA approved the recovery plans of all domestic systemically important banks. FINMA will use the events surrounding the CS crisis to further develop the requirements for recovery plans.
As a consequence of the Credit Suisse acquisition, UBS is in the process of reviewing its crisis preparedness. The bank will then submit its resolution planning as well as recovery and contingency plans to FINMA. FINMA will then assess UBS’s crisis planning and report on it separately.