Switzerland: Financial System Stability Assessment
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
Swiss financial institutions are well capitalized and could withstand the severe shocks under the adverse stress test scenarios, but macrofinancial vulnerabilities are deepening. Important reforms have been made since the 2014 FSAP, but several critical recommendations and emerging challenges have yet to be fully addressed. Capital buffers have increased across all categories of banks, and while the two global systemically important banks have downsized and deleveraged significantly since the global financial crisis, since 2013 they have been growing again. Macroprudential measures have not been taken since 2014 and is constrained by having only one mandated tool and a self-regulation agreement with banks. The financial supervisor (FINMA) has developed into a trusted supervisor, but as a small entity, it relies heavily on external auditors to conduct on-site supervision; the associated conflict of interest and supervisory objectivity risks need to be carefully managed. The combination of an ex-post funding mechanism, a low cap on banks’ contributions, and a private deposit insurance agency run by active bankers, weakens the crisis management arrangements.
Series:
Country Report No. 2019/183
Subject:
Bank resolution framework Banking Commercial banks Financial crises Financial institutions Financial sector policy and analysis Insurance companies Mortgages Stress testing
English
Publication Date:
June 26, 2019
ISBN/ISSN:
9781498321662/1934-7685
Stock No:
1CHEEA2019003
Pages:
60
Please address any questions about this title to publications@imf.org