FINMA says higher “too big to fail” capital requirements to apply to UBS
The Swiss Financial Market Supervisory Authority (FINMA) today issued a statement regarding the completion of the acquisition of Credit Suisse by UBS.
The Swiss regulator had already approved the merger of Credit Suisse and UBS on 19 March 2023. FINMA says that today’s legal consummation brings clarity and stability for the two banks, their clients and the financial centre.
FINMA will now devote the teams and resources previously available for UBS and Credit Suisse to the intensive supervision of the merged bank.
The higher “too big to fail” capital requirements due to the progressive component will fully apply to UBS after an appropriate transitional period. The capital build-up required for this will take place gradually from the end of 2025 and will be completed by the beginning of 2030 at the latest. The transitional period is necessary to enable the aforementioned risk reduction activities to take place in an orderly manner.
In addition, the existing rules and models will continue to be used by the respective entities of the two banks to calculate the risk-weighted capital requirements as well as the liquidity requirements until further notice.
Furthermore, due to accounting effects, certain transitional provisions will apply from the date of the merger.
FINMA will also set additional institution-specific liquidity requirements for the merged bank, as well as for the other systemically important banks, before the end of the year. These must be fulfilled in accordance with the revised legal basis from 1 January 2024.
Measures imposed as a result of enforcement proceedings at Credit Suisse will – wherever necessary from FINMA’s perspective – be maintained until they are implemented in the relevant entities.