Stefan Walter is convinced that the planned reform of the TBTF regulation will strengthen the resilience of the Swiss financial sector in the long term. «At the end of the day, effective regulation and supervision are about ensuring that supervised institutions remain resilient and well prepared for challenging times. This fosters trust, protects clients, and maintains the stability of the system,» he said, according to the prepared remarks, delivered at the Centro Studi Villa Negroni in Vezia, Ticino.

In his view, a robust regulation and supervision must rest on four pillars: a strong set of instruments for early intervention, adequate capital and liquidity, the preparation of effective stabilization and resolution plans, and their support through a conditional liquidity backstop. The latter would include liquidity facilities of the National Bank and a public liquidity backstop.

«Ultimately, financial institutions must be able to exit the market in an orderly manner without negatively affecting clients, financial markets, or taxpayers,» said the Finma Director.

Solid Minimum Requirements

He also reiterated the position that solid minimum requirements are needed for capital and liquidity - including a deduction of foreign holdings by banks.

Finma would continue to develop its supervision, independently of the regulatory reform proposals, also based on «Lessons Learned» in Switzerland and internationally. The supervisory methods, analyses, and practices would be strengthened. «This includes a particular focus on the areas of risk culture, governance, business model analysis, as well as the further development of stabilization and resolution plans,» said Walter.

With the creation of a division for integrated risk expertise and the merger of the supervisory areas for markets and asset management, organizational adjustments have also been made. This promotes deeper, more efficient, and more direct supervision, particularly through more on-site inspections. «We will thus become even more effective and act even more precisely.»