At business lunches, after-work drinks, or even in the small-talk portion of formal meetings, conversations among financial-sector professionals in Switzerland currently tend to circle back to the regulator Finma.

The same pattern has emerged in finews’ reporting. For some time, advisers and bankers have been saying that Finma is using its sharpest instrument – enforcement, which in extreme cases can lead to the withdrawal of a banking license – more actively than in previous years. Some observers also suggest smaller private banks may be particularly affected.

Geneva particularly affected

Little of this is visible publicly. Finma does not comment on individual proceedings, and affected institutions likewise have little interest in publicity. As a result, the true intensity of enforcement activity remains difficult for outsiders to gauge.

Still, indications of activity are mounting. On Geneva’s banking scene, several sources report ongoing or recently concluded Finma enforcement proceedings. The private banks CIM, Reyl, CBH and Mirabaud are mentioned. Market participants also say MBaer Merchant Bank is facing such a procedure.

Silence on both sides

finews contacted the institutions named for comment. Either the requests went unanswered or the banks said they do not comment on supervisory matters.

Last year, Finma itself publicly announced the opening of enforcement proceedings against Julius Baer in connection with risk-management failures related to René Benko.

No figures on ongoing enforcement cases

Asked by finews, Finma declined to provide concrete information on the number of ongoing proceedings. It cited the confidentiality of its supervisory activity and stated it «generally does not comment on individual investigations or proceedings».

Instead, the authority pointed to general principles guiding its work, notably proportionality: the smaller the institution and the lower the risk, the greater the relief from regulatory obligations. Switzerland plays a special international role here through its small-bank regime. Even outside that regime, smaller banks benefit from substantial relief and are subject to fewer on-site inspections.

Finma’s statement

At the same time, Finma emphasized that such considerations play no role in enforcement: «When protecting creditors, investors and policyholders, there are no compromises,» the authority wrote. «Rules on anti-money laundering, risk management in cross-border business, and customer protection must be complied with by all institutions. Whether small or large: if Finma obtains indications of possible violations of Swiss financial market law, it consistently follows up and takes measures where necessary.»

Whether the number of proceedings has increased recently – or how many enforcement cases against banks are currently pending – remains unanswered. Finma refers only to its general enforcement statistics, which show the number of cases concluded annually (most recently for 2024).

Lengthy and costly

Regardless of whether supervisory practice has truly tightened, the timing is notable. The number of Swiss private banks has been declining for years, with smaller institutions in particular facing mounting cost, regulatory and margin pressure. Consolidation is accelerating.

In this environment, enforcement proceedings have a distinct impact. Larger, diversified institutions can usually absorb and isolate such procedures internally. For smaller banks, however, they can strike at the core. The appointment of an investigating agent by Finma – often an audit firm – intervenes deeply in operations, can restrict new business, ties up management resources and generates significant additional costs.

Prosecutor and judge at first instance

Such mandates typically last for extended periods and may expand as additional facts are examined. For smaller institutions, the procedure can quickly become the dominant strategic issue – regardless of its ultimate outcome.

The legal structure also matters. The same Finma division conducts the investigation and issues the ruling, while affected parties have no internal avenues of appeal. Judicial review only follows later at the Federal Administrative Court. Until a final, legally binding decision is reached, years may pass.

Loss of competition and diversity

The effect therefore extends beyond individual cases. Even if – as Finma stresses – enforcement is primarily supervisory in nature, it acts as an additional accelerator of consolidation in the Swiss private-banking sector.

From a regulator’s cost-benefit standpoint, this may be understandable, but in the long term it reduces diversity and competition.