UBS has been instructed by Finma to revise its stabilization and contingency plans following its acquisition of Credit Suisse. This is due to Finma's assessment that the integration of Credit Suisse requires significant adjustments to ensure UBS's ability to reorganize and liquidate its three core business segments effectively.
As a globally systemically important bank, UBS is subject to strict requirements regarding crisis prevention. UBS must develop comprehensive stabilization and contingency plans that are evaluated annually. The stabilization plan outlines how UBS can prevent destabilization or insolvency through its own measures, while the contingency plan focuses on maintaining critical functions if stabilization efforts fail.
Finma has highlighted challenges in UBS's integration of Credit Suisse, particularly in reorganization and liquidation capabilities. UBS needs to enhance its liquidation planning to broaden its operational flexibility in the event of insolvency risks. UBS must incorporate insights from previous crises and refine its plans to implement necessary measures swiftly and independently. UBS must pay closer attention to liquidity-generating strategies to remain responsive to market changes.
UBS acknowledges the need for a robust response to Finma's requirements and asserts its eligibility for dissolution in a crisis. UBS is working to enhance its contingency planning, particularly in liquidity management and refinancing of its Swiss operations. UBS's ability to adapt its stabilization and contingency plans in response to regulatory scrutiny is crucial for maintaining investor confidence and the stability of the financial system.