FINMA says greater “too large to fail” capital necessities to use to UBS

The Swiss Monetary Market Supervisory Authority (FINMA) as we speak issued a press release relating to the completion of the acquisition of Credit score Suisse by UBS.

The Swiss regulator had already accepted the merger of Credit score Suisse and UBS on 19 March 2023. FINMA says that as we speak’s authorized consummation brings readability and stability for the 2 banks, their purchasers and the monetary centre.

FINMA will now commit the groups and sources beforehand out there for UBS and Credit score Suisse to the intensive supervision of the merged financial institution.

The upper “too large to fail” capital necessities as a result of progressive part will absolutely apply to UBS after an acceptable transitional interval. The capital build-up required for this can happen progressively from the top of 2025 and might be accomplished by the start of 2030 on the newest. The transitional interval is critical to allow the aforementioned threat discount actions to happen in an orderly method.

As well as, the prevailing guidelines and fashions will proceed for use by the respective entities of the 2 banks to calculate the risk-weighted capital necessities in addition to the liquidity necessities till additional discover.

Moreover, as a consequence of accounting results, sure transitional provisions will apply from the date of the merger.

FINMA may also set extra institution-specific liquidity necessities for the merged financial institution, in addition to for the opposite systemically necessary banks, earlier than the top of the yr. These should be fulfilled in accordance with the revised authorized foundation from 1 January 2024.

Measures imposed because of enforcement proceedings at Credit score Suisse will – wherever vital from FINMA’s perspective – be maintained till they’re applied within the related entities.