Switzerland's financial regulator has given UBS leeway for building up equity capital following its acquisition of Credit Suisse. But it's holding fast on another important point.
The Swiss Financial Market Supervisory Authority (Finma) praised today's legal completion of UBS's takeover of Credit Suisse, saying it brings clarity and stability for the two banks, their clients, and the financial center, according to a statement.
The authority also welcomes UBS's strategic plans providing for a rapid investment banking risk reduction of risk in investment banking.
Transition Period
Finma has gone a long way toward accommodating UBS, with higher capital requirements under the too-big-to-fail regulation only to fully apply to the new entity after an appropriate transition period, as already reported. The necessary capital build-up will begin gradually starting at the end of 2025 and is to be completed by the beginning of 2030 at the latest, Finma said Monday.
«The transitional period is necessary to enable the aforementioned risk reduction activities to take place in an orderly manner,» Finma said.
With regard to securing liquidity risks, the supervisors are less accommodating. In terms of liquidity, Finma will set additional institution-specific requirements for the merged big bank this year, as it will for the other remaining three systemically important banks. These are to be fulfilled by the revised legal basis as of January 1.
Finma CEO Urban Angehrn said, «Following the completion of the transaction, the merged bank has the necessary capital and liquidity resources to carry out these risk reduction activities quickly and decisively and to complete the integration.»
