Switzerland’s Banking Sector: A Complex Regulatory Framework

Switzerland’s banking sector is renowned for its strict regulatory environment, designed to protect individual customers and maintain financial stability. At the heart of this regime are the goals of banking regulation, which aim to safeguard creditors and ensure stability through a combination of preventive and curative measures.

The Regulatory Framework

The Swiss banking regulatory framework is implemented through a range of legal instruments, including:

• Federal legislation
• Ordinances
• Circulars
• Self-regulatory directives

The Swiss Financial Market Supervisory Authority (FINMA) plays a crucial role in overseeing individual institutions, while the Swiss National Bank has specific powers to regulate the financial system as a whole.

Post-Financial Crisis Reforms

In response to the 2007-2008 financial crisis, many areas of banking regulation have been tightened up and improved. Notable changes include:

• Introduction of a “too big to fail” regime for systemically important financial institutions
• Implementation of the Basel III international standards on capital adequacy and liquidity

Ongoing Reforms

Work is currently underway to implement the remaining elements of the Basel reform package, led by the Swiss Bankers Association through its national working group. Key areas under consideration include:

• Proportionality: effective tailoring of requirements to different institutions
• Assessment of expected economic effects

The Swiss Bankers Association is committed to ensuring that regulation of the Swiss financial centre is both credible and competitive, closely monitoring developments at the global and national levels.

Additional Resources

For further information on Switzerland’s banking sector regulations, readers are directed to the following websites:

• Basel Committee on Banking Supervision
• Swiss National Bank
• FINMA