In its report, the Parliamentary Investigation Committee made 20 recommendations to the Federal Council. In addition, there are four motions, six postulates, and a parliamentary initiative. Here are the key points.

In its 500-page report, the PUK sees a need for improvement both in enforcement and at the legislative level. It has issued 20 recommendations (in german) to the Federal Council and submitted six postulates, four motions, and one parliamentary initiative.

The committee concluded that the «Too Big to Fail» (TBTF) legislation, particularly in emergency planning, is too focused on Switzerland and that the resolution planning for a globally active G-SIB (Global Systemically Important Bank) must necessarily take international linkages into account.

The TBTF regulation was not designed for a crisis of confidence and neglects important market indicators.

The current regulation of audit supervision also requires action. Future relaxations regarding capital and liquidity requirements should be limited, the report continues.

Improving Coordination and Information Flow

The coordination between the various authorities and the involvement of the entire Federal Council, as well as the information exchange, must be improved. The report calls for an institutionalized framework to ensure the transition between risk management and crisis management. It also suggests exploring how the role of the GSK (Financial Stability Commission) in this area can be strengthened.

Regarding the Swiss Financial Market Supervisory Authority (Finma), the report calls for creating the necessary conditions for the effective enforcement of enforcement procedures. This includes improving communication about the procedures, particularly with respect to foreign legal frameworks.

The quality and quantity of the capital of systemically important banks should also be reviewed. Consideration should also be given to restricting legal remedies and substantially shortening appeal processes for prudential decisions by Finma.

Transparency and Traceability

The report proposes increasing the transparency and traceability of RAB (Resolution and Bank Inspection) inspection processes, with decisions about the scope of inspections to be formalized and systematically documented. The frequency and scope of inspections should be adjusted based on the risks posed by SIBs (Systemically Important Banks), and a more dynamic supervisory concept should be introduced. Corrective measures should undergo more comprehensive reviews.

A number of recommendations focus on the collaboration and information flow between the Federal Council, the Federal Department of Finance (EFD), the Swiss National Bank (SNB), Finma, and the State Secretariat for International Financial Matters (SIF). Information must be transmitted in a timely manner to the various members of crisis bodies and across levels. Improvements are also needed in the process of departmental handovers, which should be institutionalized.

The PUK emphasizes that it is essential to consider that UBS is the only remaining G-SIB in Switzerland. It is, in relation to the national Gross Domestic Product (GDP), much larger than other financial institutions relative to the GDP of their respective countries. This should be appropriately reflected in regulation.

More Tools for Finma

The motions make demands such as limiting the relaxation of capital and liquidity requirements for SIBs. The enforcement power of Finma should be strengthened, for instance, by giving it authority to impose fines, expand its early intervention toolkit, or intervene in capital planning.

The SNB should be given the power to impose preparatory measures on SIBs for potential extraordinary liquidity assistance (ELA).

The Federal Council now has until the next session to formulate its position based on the final report. The discussion of the report is scheduled for the Spring 2025 session.

Separately, the PUK plans to submit a parliamentary initiative to amend the provisions of the Parliamentary Law concerning the PUK, as it was emphasized multiple times at the press conference on Friday that the PUK has reached its limits in dealing with a case of this scale.