Swiss Emergency Plan of Credit Suisse approved by FINMA
The Swiss Financial Market Supervisory Authority FINMA, the independent supervisor of the Swiss financial market, has announced the results of its assessment of the five Systemically Important Banks in Switzerland under the Swiss Too Big to Fail regime, with Credit Suisse announcing that it has successfully completed the review.
The Swiss Too Big to Fail regime aims to reduce the risks to the stability of the Swiss financial system. The regime is designed to ensure the continuity of functions that are indispensable to the Swiss economy, including for instance the domestic deposit and lending business as well as payment transactions, and prevent the need for publicly funded support in case of severe crisis.
By law, Systemically Important Banks in Switzerland were required to develop a Swiss Emergency Plan by the end of 2019, designed to maintain systemically relevant functions in the event of threatened insolvency. FINMA today announced that Credit Suisse successfully passed its assessment and delivered a credible Swiss Emergency Plan.
In parallel, FINMA and Credit Suisse, in line with the guidance of the Financial Stability Board, are working to establish an internationally coordinated global resolution plan by 2022. In this context, FINMA also commended the substantial progress made by Credit Suisse globally. According to FINMA, Credit Suisse has initiated major preparatory measures required to implement this resolution plan and has been able to make significant progress in terms of its global resolvability. Thus, FINMA has assessed the requirements as fulfilled with regard to the separation of complex structures. As further standards develop, Credit Suisse expects to continue investing into improvements with respect to resolvability over the next couple of years.
Thomas Gottstein, Chief Executive Officer, Credit Suisse, said “After the establishment of Credit Suisse (Schweiz) AG in 2015, which consolidates the systemically important functions and other critical operations in a separate legal entity in Switzerland, the development of a credible Swiss Emergency Plan and the successful passing of the FINMA review are major landmarks for Credit Suisse, its clients, stakeholders and the Swiss economy. Credit Suisse will continue to work closely with FINMA to monitor and address future regulatory and industry developments.”
David Mathers, Chief Financial Officer, Credit Suisse, said “Defining a global resolution approach, addressing capital requirements and implementing structural and operational enhancements has been key to our Too Big to Fail agenda. Also, Credit Suisse has done pioneer work in the area of the bail-in mechanism, the new international standard to bank resolution. As of 4Q19, Credit Suisse has CHF 91.3 billion total loss-absorbing capacity (TLAC) with total balance sheet assets of CHF 787.3 billion. The result of the FINMA assessment testifies the credibility of our approach. This, together with a simpler structure is at the core of becoming fully resolvable.”