The State Secretariat for International Financial Matters (SIF), headed by Daniela Stoffel, pushed ahead with legislative projects in the past year, including on banking stability, combating money laundering and expanded market access, as can be seen in the 2024 activity report published on Thursday.

SIF played a leading role in developing the package of measures proposed by the Federal Council in its April report on banking stability in response to the Credit Suisse (CS) case.

Can the TBTF Be Saved?

The most important finding: in order to protect taxpayers and the economy, the too-big-to-fail concept (TBTF) must be further developed and strengthened. The question of how realistic this plan is after the concept was supposedly «ready for implementation» at enormous expense since the financial crisis remains unanswered.

One measure that the Federal Council is proposing for this is higher capital requirements, particularly for UBS. SIF now points out that the amendment to the Capital Adequacy Ordinance adopted by the Federal Council in November 2023 will «increase the requirements for the remaining big bank UBS». On average, however, the requirements for the banking sector will not change significantly.

Higher Capital Requirements for UBS Since the Beginning of 2025

This sounds reassuring at first glance, but raises the question of whether the amendment to the ordinance, which came into force at the beginning of the year and with which Switzerland is implementing the final Basel III standards internationally as a pioneer, really achieves the goal of strengthening solvency and liquidity in the banking sector as a whole, or whether it is not more of a Lex UBS.

SIF's mandate is to represent Switzerland's interests in international financial, monetary and tax matters. Therefore, it also participates in relevant international organizations such as the Financial Stability Board (FSB) and the Organization for Economic Cooperation and Development (OECD).

Lots of Activity Behind and on the International Stage

The fact that a major Swiss bank had to be rescued in March 2023 caused quite a stir worldwide. In February, the FSB published the Swiss country report on the implementation of the TBTF reforms for systemically important banks.

The measures to combat money laundering are also to be strengthened. In May, the Federal Council adopted the dispatch on the «Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners» for the attention of parliament. Among other things, it proposes the introduction of a federal register (transparency register).

What Are the Benefits of the Transparency Register in the Fight Agaist Money Laundering?

Companies and other legal entities will have to enter their beneficial owners in this register. It is also planned that specific due diligence obligations will apply when carrying out certain advisory activities that entail an increased risk of money laundering. «The measures correspond to international standards», states the SIF, which of course does not yet constitute a statement on the meaningfulness and quality of both the measures and the standards.

The minimum tax of at least 15 percent on the profits of large internationally active companies adopted by the OECD is also mentioned.

Switzerland Tamely Implements OECD Minimum Tax

«Switzerland has introduced elements of this minimum tax as of 2024 and 2025 respectively. Technical negotiations are continuing at international level,» the SIF states dryly, without mentioning that the USA, among others, has not yet implemented the tax and that Switzerland has so far waived the «subsequent taxation» actually planned for this case (probably the most compelling argument for voters to clearly approve the agreement in 2023).

The automatic exchange of information (AEOI) appears to be running more smoothly. In 2024, Switzerland transmitted data on 3.7 million financial accounts to 108 countries and received data on 3.4 million financial accounts in return. The AEOI is set to be expanded to include crypto assets, with the Federal Council conducting a consultation on this between May and September. The extension is expected to take effect on January 1, 2026.

FACTA Finally Mutual from 2027

The SIF was also involved in negotiating the agreement between Switzerland and the UK on mutual recognition in the area of financial services (Berne Financial Services Agreement). In September, the Federal Council approved the corresponding dispatch, and the agreement was signed in December 2023.

The acronym FACTA (Foreign Account Tax Compliance Act) has been a household name in the Swiss financial center for a few years longer than AEOI. In June, Switzerland and the USA signed a new FACTA agreement. Until now, Swiss financial institutions have unilaterally provided US tax authorities with information on US accounts. From January 2027, Switzerland will also receive corresponding information from the USA as part of an automatic exchange of information between authorities.

Sustainability and Open Finance: Exemplary Federal Council Restraint

Sustainability and open finance also kept the SIF on its toes. In June, the Federal Council took note of the financial sector's new self-regulation against greenwashing. In December, the Federal Council opened a consultation on amending the Ordinance on Reporting on Climate Issues, which will run until March 21, 2025.

In June, the national government was briefed on the latest developments in open finance in Switzerland and commendably chose not to impose regulatory measures in this area. In July, SIF organized the international fintech conference Point Zero Forum in Zurich in collaboration with Singapore and with the support of the Swiss Financial Innovation Desk (FIND).

Would You Have Expected that?

The SIF activity report also contains a small surprise.

Who would have expected to find the message on the financing of damage to buildings in the event of earthquakes adopted by the Federal Council in December, the content of which has been judged quite controversially?