Financial Crime World

Bank Regulation in Liechtenstein: An Overview

General Regulatory Framework

Liechtenstein has implemented and transposed EU directives into national law, providing a general regulatory framework for banks operating within its jurisdiction.

Key Regulators and Licensing Requirements

Regulator of Banks

The Financial Market Authority (FMA) is the competent authority responsible for regulating banks in Liechtenstein.

Banking Licence

Yes, a banking licence is required to operate a bank in Liechtenstein. The FMA assesses the financial situation and condition of a bank to determine its solvency.

Capital Requirements and Asset Restrictions

  • Minimum Capital Requirements: Capital requirements depend on the type of bank and its activities.
  • Asset Restrictions: Banks are subject to various regulations and restrictions on asset types, including:
    • Not specified for minimum liquidity coverage ratio (LCR) requirement.
    • Foreign banks must comply with Liechtenstein’s banking laws and regulations.

Operations Abroad and Anti-Money Laundering

  • Operating Branches or Subsidiaries: Yes, but subject to regulatory approval.
  • Regulating Branches or Subsidiaries of Foreign Banks: Foreign banks must comply with Liechtenstein’s banking laws and regulations.
  • Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT): Banks must implement AML/CFT measures and report suspicious transactions.

Resolution Regime and Bail-In Tool

  • Resolution Regime: Liechtenstein has implemented the Bank Recovery and Resolution Directive 2014/59/EU (BRRD).
  • Bail-In Tool: Yes, bail-in is possible under the BRRD.
  • Gone Concern Capital (TLAC): Yes, as part of the CRD IV/CRR framework and BRRD.
  • Recent Trends: Influenced by EU legislation, globalisation, FinTech, and digitalisation.
  • Biggest Threat: Attracting a qualified workforce.