FINMA Suspends UBS's Emergency Plan Approval, Highlights $200 Billion Loss Capacity

Oct 15, 2024, 07:16 AM

Swiss financial regulator FINMA has instructed UBS to revise its emergency planning to ensure that it can be safely wound down in a crisis, taking into account the integration of Credit Suisse. FINMA suspended the annual approval of UBS's recovery and emergency plans, stating that the integration requires adjustments to ensure continued resolvability. UBS is expected to further strengthen its crisis preparations and resolution planning, including considering 'single point of entry' recapitalization. The regulator emphasized that additional options are required for systemically important banks. UBS noted that it has a sustainable business model and a loss-absorbing capacity of around $200 billion. The experiences from the Credit Suisse crisis and its rescue by UBS necessitate the further development of resolution planning to expand existing plans.