On Wednesday, the Federal Council held its annual descussion with the leadership of the Financial Market Supervisory Authority (Finma), represented by Chairwoman of the Board Marlene Amstad and Director Stefan Walter. According to a press release, the topics discussed were current supervisory and regulatory issues as well as the strategy defined by the Finma Board of Directors.

At its meeting, the Federal Council subsequently approved the strategic objectives of the regulatory authority. The objectives for the 2025 to 2028 strategy period focus on strengthening preventive and effective supervision as well as the integrity and financial and operational resilience of supervised institutions.

Countering the Risks of UBS's Systemic Importance

A key point in the implementation is that Finma continuously reviews the supervisory concept for UBS as needed to address the risks associated with the bank's systemic importance, according to the authority's detailed press release.

Finma continues to attach great importance to the financial resilience of supervised institutions: «In doing so, it pays particular attention to how supervised institutions deal with market risks, credit risks, liquidity risks and actuarial risks. Finma ensures that the institutions maintain appropriate levels of capital and liquidity in order to withstand severe financial shocks.»

Contributing Expertise for Effective Framework Conditions

Furthermore, Finma wants to contribute its expertise to the development of effective framework conditions. In addition, the authority aims to enhance its impact, improve efficiency, and strengthen the effectiveness of its communication.

The approval of strategic objectives and the debate are two key oversight tools used by the Federal Council to guide the supervisory authority, which operates with significant autonomy.

Federal Council Will Comment on Finma Instruments in the First Half of 2025

The Federal Council also holds out the prospect that it will also comment on FINMA's supervisory instruments in the first half of 2025 as part of the follow-up work to its report on banking stability from April 2024. «It will take the expected PUK report on the CS emergency merger into account in the further development of the too-big-to-fail dispositive.»

The PUK report is widely anticipated to be published later this year. The question of which additional instruments Finma should be given is controversial, as was recently shown by the Swiss Bankers Association's statement on the proposals made by the Federal Council in its report on banking stability.