Finma Assesses UBS's Crisis Preparedness
The Swiss Financial Market Supervisory Authority (Finma) announced on Thursday, September 25, 2025, its latest assessment of UBS Group AG's emergency plan, noting significant progress in the bank's resolvability following its acquisition of Credit Suisse. Despite these advancements, the regulator highlighted areas requiring further development and called for legislative changes to enhance crisis management options for systemically important banks in Switzerland.
Progress in Resolvability
Finma acknowledged that UBS has made strides in addressing shortcomings in its 'living will' since the March 2023 takeover of Credit Suisse. The regulator specifically cited the merger of both institutions' parent and Swiss banks as a key factor improving the group's resolvability. Finma expressed confidence that UBS could be recapitalized and resolved using its preferred strategy, which involves a 'single point of entry' recapitalization.
Key Areas for Improvement and Legislative Demands
While recognizing progress, Finma stated that UBS's emergency plan, though largely fulfilling current statutory requirements, 'needs to be better integrated in the resolution plan in the future and thus cannot currently be regarded as executable.' The regulator emphasized the need for 'greater optionality' for authorities, which would necessitate legislative changes. These changes would allow for additional measures such as a market exit, a forced sale of the bank or its parts, and restructuring, beyond the current strategy of continuing business activities as part of a restructuring of the business model. Furthermore, Finma suspended its annual review of UBS's recovery plan for the second consecutive year due to the ongoing integration work related to Credit Suisse.
Context of the Credit Suisse Takeover
The emergency takeover of Credit Suisse by UBS in March 2023 significantly increased UBS's size and complexity, leading to heightened scrutiny of its crisis planning. The Swiss government has since proposed stricter measures for UBS to prevent a recurrence of the Credit Suisse crisis and to protect taxpayers from potential losses. Finma's assessment underscores the ongoing efforts to adapt regulatory frameworks to the new banking landscape in Switzerland.
UBS's Response
In response to Finma's assessment, UBS affirmed that its emergency plan is designed to be available in an extreme crisis scenario. The bank stated that this plan aligns with legal requirements to ensure the continuity and protection of systemically important functions within Switzerland. UBS also confirmed it meets the current requirements to be resolved under its preferred resolution strategy and is actively working on the further development of its emergency plan in collaboration with Finma and other domestic and international authorities.
6 Comments
Coccinella
Acknowledging the complexity of integrating Credit Suisse, UBS's efforts are understandable. However, the ongoing need for legislative changes and the non-executability of the plan show that Switzerland is still far from a robust crisis management solution.
Muchacho
The focus on 'greater optionality' for authorities through legislative changes is a sensible goal to prevent future crises. But we must be careful not to stifle innovation or create an overly burdensome regulatory environment for healthy banks.
ZmeeLove
While it's positive that UBS is making progress on its emergency plan, Finma's call for legislative changes suggests current frameworks are still inadequate. We need more than just internal bank adjustments for true security.
Habibi
Legislative changes? Just empower Finma properly already!
Mariposa
The article highlights Finma's confidence in UBS's recapitalization strategy, which is good news. However, the suspension of annual reviews due to integration work raises questions about the true state of readiness and oversight.
KittyKat
Good to see UBS making strides after the Credit Suisse fiasco.