UBS's capital level is under scrutiny as authorities consider increasing requirements, potentially up to 100% for foreign units. The final decision hinges on UBS's resolvability and the credibility of its resolution plans, with the aim of protecting the economy and taxpayers from mismanagement costs. Current capital requirements are lower due to the smaller domestic market compared to larger foreign markets.
UBS's market power following its acquisition of Credit Suisse is under scrutiny, with authorities including the Price Supervisor, Finma, and the Competition Commission (Comco) recently discussing public complaints and market observations. A report indicated UBS may hold a dominant position in certain markets, yet Finma did not impose competition law conditions on the merger.
Authorities are scrutinizing UBS's market power following its takeover of Credit Suisse. A recent meeting involving the Price Supervisor, Finma, and the Competition Commission addressed public complaints and market observations, revealing indications of UBS's dominant position in certain markets. However, Finma did not impose any competition law conditions on the merger.
Finma has mandated UBS to enhance its stabilization and contingency plans following its acquisition of Credit Suisse, citing the need for adjustments to ensure effective reorganization and liquidation of its core businesses. The authority has suspended the annual approval process and expects UBS to refine its liquidation strategy, particularly in light of lessons learned from past crises, including rapid deposit withdrawals. UBS has acknowledged the need for these improvements and has already initiated work to expand its existing plans, emphasizing its robust business model and significant loss-absorbing capacity.
UBS has been criticized by the Swiss financial supervisory authority, Finma, for its inadequate emergency plans following its takeover of Credit Suisse. The bank must revise these plans by the end of 2026 to ensure an orderly wind-up in a crisis, amid increasing international pressure for stricter capital requirements and detailed separation strategies. This revision could incur costs in the hundreds of millions and impact profitability and dividend policies, but UBS is cooperating with authorities and views the review as a chance to enhance its resilience.
UBS is required by the Swiss Financial Market Supervisory Authority (Finma) to revise its emergency restructuring plans following the integration of Credit Suisse. The bank must expand its options for insolvency, including the potential sale or shutdown of individual businesses, as the current strategy only allows for reorganization. As a globally systemically important institution, UBS must ensure its stabilization and emergency plans are robust and effective in crisis prevention.
UBS has been ordered by Switzerland's financial regulator, Finma, to revise its emergency and stabilization plans following its takeover of Credit Suisse. The regulator emphasized the need for enhanced crisis preparedness, particularly in light of the rapid deposit withdrawals experienced by Credit Suisse. While the annual assessment of these plans for 2024 has been suspended, concerns remain about UBS's size and its potential impact on the Swiss economy in future crises.
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