According to the Swiss Federal Department of Finance (FDF), the Financial Stability Board (FSB) has taken a positive view of the “too big to fail” legislation in its peer review report on Switzerland.
The Swiss FDF explains in its release that the reaction of the authorities during the financial crisis and the progress made regarding the supervision of insurance companies and pension funds are also positively highlighted, while noting that the FSB does see room for improvement in the case of specific aspects of banking supervision, notably as regards the use of external auditors, for example.
The FDF explains: “Within the scope of its membership of the FSB, Switzerland has undergone a peer review by other FSB members for the first time.”
“According to the report published today, the FSB appreciates the 'too big to fail measures' which should enter into force in March 2012. In this regard, the FSB recognizes Switzerland's influential role in international discussions on the capital requirements for systemically important banks.”
It continues: “The FSB recognises the progress made by Switzerland in the area of bank supervision, and particularly regarding FINMA's operational independence and resources. However, the FSB views the extensive use of external auditors with a critical eye. Regarding the cantonal banks, the FSB notes the good quality and high level of their capital. However, it suggests that the cantons step up their reforms in order to eliminate the state guarantee enjoyed by most cantonal banks in order to put them on an equal footing with the other banks.”
It adds: “The FSB welcomes the latest insurance oversight reforms, and particularly the introduction of the Swiss Solvency Test. The FSB acknowledges the introduction of a supreme supervisory committee in the area of pension fund supervision as a step towards the recommended centralisation.”
The FSB report also positively highlights measures taken at the end of 2008 to stabilize the Swiss bank UBS.
The FSB underscores, however, that, in its opinion, the Swiss financial centre overall faces a number of major challenges due to the changing regulatory environment.
A comprehensive report in our Intelligence Report series, analysing the situation on the ground in each of the main offshore banking centres, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report3.aspTags: law | offshore | banking | financial services | capital markets | insurance | legislation | offshore banking | banking secrecy | international financial centres (IFC) | Switzerland | standards | regulation | services | Switzerland
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