The banking and financial sector of the Swiss economy has a long tradition of self-regulation. It offers the advantages of a practical approach, flexibility and a high degree of differentiation.
The sector regulates itself in a number of ways. Typical examples include the Swiss Bankers Association’s guidelines and its code of conduct on combating money laundering (CDB).
Self-regulation by the banking sector complements and fleshes out key areas of regulation by the state. It can take various forms.
One of the biggest advantages of self-regulation is that it is based on practical experience. We develop our standards in close liaison with experts from our member institutions, ensuring both market proximity and widespread acceptance. Requirements can be adapted relatively quickly and easily to reflect changing market conditions and technological developments. For example, we have revised our guidelines for the mortgage business a number of times over recent years in response to market trends. Our self-regulation is also typically “principles-based”, leaving scope for effective action geared to the specific situation of an individual bank.
Forms of self-regulation
In practice, self-regulation takes the following forms:
Self-regulation recognised as a minimum standard by FINMA
Art. 7 para. 3 of the Financial Market Supervision Act empowers FINMA to recognise and enforce self-regulatory guidelines as a minimum standard within the terms of its supervisory powers. This means that not only members of the self-regulatory organisation concerned but also other participants in the sector are required to adhere to them as a minimum.
Voluntary self-regulation by the SBA
Voluntary self-regulation is a key area and one that is likely to gain importance going forward. Its binding nature derives from instruments under private law: for member institutions this typically means articles of association and resolutions of the board.