Both UBS and Credit Suisse scored consistently green in the recovery plan, Swiss contingency plan and institution resolvability categories. Finma defines this as follows:
Recovery plan: “In the recovery plan, the systemically important institution sets out the measures it will take to ensure its stability in the long term in the event of a crisis and to be able to continue its business activities without government intervention.”
Swiss emergency plan: “Systemically important banks must demonstrate in the emergency plan that their systemically important functions can be continued without interruption in the event of a crisis. Only functions that are critical for the Swiss economy are considered systemically important. »
Resolvability: “Resolvability describes a company’s ability to fail in an orderly manner.”
“FINMA still considers the Swiss emergency plans of Credit Suisse and UBS to be ready for implementation,” it said.
Finally, last month, Swiss authorities decided against the liquidation of Credit Suisse because it would have sparked a much broader financial crisis, and instead helped broker its emergency takeover by UBS.
Post Finance received a red note for having “no plausible” Swiss contingency plan “to achieve effectiveness,” while Zürcher Kantonalbank received a yellow because it still only has a “plausible” Swiss contingency plan.
Bloomberg
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