In Switzerland, as in many other countries, the financial sector is one of the most strictly regulated areas of the economy. Banking and financial market regulation is key to the nation’s attractiveness as a location for financial services.
Goals of banking regulation
The primary aim of banking regulation is to protect individual bank customers – in particular creditors – and to safeguard and enhance the stability of the banking and financial system as a whole. Regulatory interventions can be preventive or “prudential” – limiting risks by, for example, setting capital requirements for banks – or curative, limiting damage through, for instance, depositor protection. The Swiss financial centre has an effective regime of both preventive and curative measures, making it one of the best regulated anywhere in the world.
Organisation of banking regulation
Banking and financial market regulation is implemented through a range of legal instruments. The fundamental principles are codified in federal legislation (such as the Banking Act and Financial Market Supervision Act), while the details are set out in Federal Council ordinances (such as the Banking Ordinance). In addition, there are ordinances and circulars issued by the Swiss Financial Market Supervisory Authority FINMA, as well as self-regulatory directives, guidelines and recommendations issued by the financial sector itself, in particular the Swiss Bankers Association. The body principally responsible for overseeing and monitoring individual institutions is FINMA, which functions as an independent federal regulatory authority. It commissions audit firms to carry out regulatory audits of banks on its behalf as part of a dual supervisory system. Alongside this “microprudential” regulation at individual institution level, the Swiss National Bank (SNB) has specific powers of “macroprudential” regulation in relation to the system as a whole. These include the power to propose activating the countercyclical capital buffer.
Many areas of banking regulation in Switzerland have been substantially tightened up and improved in response to the financial crisis of 2007–2008. Examples include the “too big to fail” regime for systemically important financial institutions, and implementation of the Basel III international standards on capital adequacy and liquidity drawn up by the Basel Committee on Banking Supervision (BCBS).
Work is currently under way to implement the remaining elements of the Basel reform package in Switzerland (“Basel III final”). The Swiss Bankers Association is closely involved in this process through the national working group, and is acting to ensure that the outcome is both credible and proportionate. Key areas include consideration of how the reforms are enacted in comparable financial centres, effective tailoring of requirements to the circumstances of different institutions (proportionality) and a meaningful assessment of the expected economic effects (quantitative impact study and regulatory impact assessment).
The SBA’s involvement
Banking regulation is an important focus of the Swiss Bankers Association’s work. It monitors developments both globally and at the national level, and is committed to ensuring that regulation of the Swiss financial centre is both credible and competitive. For further information see the websites of the Basel Committee on Banking Supervision, the Swiss National Bank and FINMA.
Links & Documents
SBA Position Paper: Basel III Final (2022)
Stellungnahme der SBVg zu Basel III Final: Nationale Umsetzung - Änderung Eigenmittelverordnung und neue FINMA-Verordnung (2022)
Stellungnahme der SBVg zur Totalrevision des FINMA-Rundschreibens 2008/21 «Operationelle Risiken - Banken» (2022)
Stellungnahme der SBVg zur vorgeschlagenen Teilrevision des Postorganisationsgesetzes POG (Aufhebung des Kredit- und Hypothekarvergabeverbots von PostFinance)
Stellungnahme der SBVg zur Teilrevision des FINMA-Rundschreibens 2015/2 «Liquiditätsrisiken»
Stellungnahme der SBVg: Anhörung zur Teilrevision des FINMA-Rundschreibens 2013/3 «Prüfwesen»
Stellungnahme der SBVg zur Anpassung der Verordnung über die Eigenmittel und Risikoverteilung für Banken und Effektenhändler (ERV) sowie zur Teilrevision diverser Rundschreiben im Zuge der Umsetzung des Kleinbankenregimes (PDF)
Expected Loss – Stellungnahme der SBVg zur Rechnungslegungsverordnung-FINMA und zur Totalrevision FINMA-Rundschreiben 20/xx «Rechnungslegung – Banken»
Positionspapier zur Proportionalität