FINMA strengthens UBS oversight, seeks expanded supervisory powers

In a statement issued on Wednesday at its annual media conference in Bern, the supervisory authority said that it had fulfilled its legal mandate to protect the functioning of the financial markets and financial market clients. It had analysed the CS crisis in detail and learned lessons from it. The supervisory authority is now making “targeted” adjustments to its supervision.  

One of the new instruments the authority would like to see is the clear allocation of responsibilities for individual transactions to specific bank managers (“senior managers regime”). However, it also wants to have the right to impose fines. In addition, FINMA wishes to have permission to communicate more actively on its activities. Switzerland now has the power to shape its financial centre of the future, said Marlene Amstad, Chairwoman of the Board of Directors.  

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Focus on UBS risks   

According to reports, since the takeover of CS by UBS, FINMA has merged the existing teams in the supervision of the major banks and expanded supervision. A total of forty on-site inspections are planned at UBS in Switzerland and abroad, according to Thomas Hirschi, head of the banks division. Two “extensive stress tests” will also be carried out this year.  

According to FINMA, the focus will now be on the risks arising from the integration process and operational stability caused by the merger with CS. Supervision will also focus on the combined bank’s capital and liquidity planning as well as its business behaviour. In addition, the stabilisation and emergency planning of the combined bank will be critically examined.  

On-site inspections in 2023  

As stated in its annual report, in 2023 FINMA conducted a total of 732 investigations concerning law enforcement, compared to 850 the year before. It also concluded 27 legal cases against companies and natural persons. According to the press release, in the previous year there had been 39 cases, in all of which the courts had judged in the supervisory authority’s favour.  

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Last year, FINMA carried out a total of 96 on-site inspections at Swiss banks compared to 113 in the previous year. According to the statement, the above-average figure for 2022 was a result of unplanned on-site inspections due to sanctions. In addition, FINMA cancelled some on-site inspections planned for 2023 following the takeover of CS by UBS.   

FINMA also carried out on-site inspections of insurance companies. In total, 51 inspections were carried out in 2023, one more than the previous year. Focus was directed at life insurance, money laundering at insurance groups with life insurance business, as well as cyber risks.  

The banking supervisor was also able to finalise a total of 1,248 new registration applications from insurance intermediaries. In accordance with the revised provisions of the Insurance Supervision Act, this professional group is now authorised and supervised by FINMA.  

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Adapted from German by DeepL/mg/amva