Swiss Authority Says UBS Must Revise Recovery and Emergency Plans
Swiss financial market supervisory authority FINMA will require UBS to revise its recovery and emergency plans due to the bank’s June 2023 takeover of Credit Suisse.
The regulator has suspended the annual approval of UBS’ recovery and emergency plans and expects the bank to further develop those plans, FINMA said in a Tuesday (Oct. 15) press release.
“In its assessment of UBS’s resolvability as at 31 December 2023, FINMA determined that the integration of Credit Suisse had created obstacles,” the release said.
The release added that UBS must harmonize the group structures, processes and IT platforms due to the integration.
“The identified obstacles are currently being overcome by means of manual data aggregation until all processes function as automatically as possible again and the data is transferred to the strategic systems,” the release said.
The release also said UBS must provide additional options for action to strengthen its crisis preparations and resolution planning.
Reached for comment by PYMNTS, a UBS spokesperson said in an emailed statement that the bank has already started this work.
“UBS has a sustainable business model with a total loss absorbing capacity of around USD 200 billion,” the statement said. “As FINMA confirms in its press release, UBS meets the current requirements to be resolvable in accordance with the preferred resolution strategy in the event of a crisis.
“The experience of the Credit Suisse crisis and the rescue by UBS now require the further development of resolution planning in order to expand existing plans in a targeted manner,” the statement added. “UBS has already started this work.”
Switzerland’s central bank announced in March 2023 that UBS would purchase its then struggling rival Credit Suisse in a $3 billion government-supported deal.
The announcement followed nine days of unease around the banking sector after Credit Suisse saw its shares shed a quarter of their value and was forced to seek a $54 billion central bank loan that did little to restore investor confidence.
In June 2023, following the crisis around Credit Suisse, the Swiss National Bank called for a review of “too big to fail” regulations, saying the crisis highlighted a need for new measures to strengthen banks’ resilience, bolster confidence in banks and provide a wide range of options for dealing with banks in crisis.
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