Prudential regulation 

Goals of banking regulation 

The primary aim of banking regulation is to protect individual bank customers and the stability of the banking and financial system as a whole. The focus is therefore on protecting creditors and enhancing system stability. Regulatory interventions can be preventive or “prudential” – limiting risks by, for example, setting capital requirements for banks – or “curative”, limiting damage through, for instance, deposit insurance. 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 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. Under the dual supervisory system, audit firms carry out regulatory audits of banks as required by the Banking Act. 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 right to propose activating the countercyclical capital buffer.  

Current developments 

The Swiss implementation of the international standards on capital adequacy and liquidity regulation set by the Basel Committee on Banking Supervision (BCBS), also known as “Basel III Final”, entered into force at the start of 2025. The SBA followed the development of the Swiss regulatory package closely for many years and issued a number of public statements on the subject. We welcome this reform in the interests of system stability and have in particular lobbied for the regulations to be measured and differentiated. We also believe that it is very important for the Swiss implementation to be coordinated as much as possible with those of other leading financial centres in terms of timing and content in order to preserve international competitiveness. Details can be found under “Basel III Final”. 

In response to the Credit Suisse crisis in 2023, a comprehensive package of reforms to Swiss banking regulation and supervision is currently under discussion. The Federal Council published an in-depth report on banking stability in April 2024 in which it proposes 29 measures that should be put in place or at least examined. In December 2024, the Parliamentary Investigation Committee presented its report on the authorities’ management of the crisis. It contains measures relating to a range of topics – including corporate governance, capital adequacy, liquidity and crisis management – that primarily concern systemically important banks. The SBA is engaging in constructive dialogue with politicians, the authorities, the media and the general public. We are committed to ensuring targeted but fair solutions that respect the principles of competitiveness and proportionality. More information on this complex subject can be found on our special page “Takeover of CS by UBS”. 

The SBA’s involvement 

Banking regulation is an important focus of the SBA’s work. It monitors developments both globally and at the national level, and it is committed to ensuring that regulation of the Swiss financial centre is both credible and competitive. 

Further information can be found on the websites of the Basel Committee on Banking Supervision, the State Secretariat for International Finance (SIF), the Swiss National Bank and FINMA.