An IMGlobalWealth.com News Report
Switzerland’s financial watchdog, the Swiss Financial Market Supervisory Authority (FINMA, Eidgenössische Finanzmarktaufsicht), has offered a cautiously upbeat assessment of UBS’s crisis readiness, while warning that its emergency wind-down plan remains inadequate¹.
FINMA, which regulates banks, insurers and financial markets, said the lender’s recovery and resolution plans are “workable” on paper but cannot yet be executed in practice without new legislation².
UBS, Switzerland’s largest and best-known bank, is a global leader in wealth management and investment banking, with a presence in more than 50 countries. Its influence stretches well beyond Zurich: it advises some of the world’s wealthiest clients, manages trillions in assets, and plays a central role in global financial markets. That scale, however, is also its greatest vulnerability.
Legislative reform is required to give the authorities the flexibility to restructure or wind down a lender of UBS’s size without jeopardising financial stability³.
The challenge is magnified by UBS’s unique position. Following the state-orchestrated rescue of Credit Suisse in 2023, it became Switzerland’s only globally systemically important bank. Its balance sheet now hovers around $1.7trn – nearly double Switzerland’s GDP⁴.
In March 2023, Credit Suisse collapsed after years of scandals, losses, and investor flight triggered a crisis of confidence. To avert a wider financial meltdown, Swiss authorities brokered an emergency takeover by UBS, backed by government guarantees and central bank liquidity. The deal created a single banking giant, UBS, whose balance sheet now dwarfs Switzerland’s economy, concentrating systemic risk in one institution.
That concentration of risk has left policymakers grappling with the question of whether a small state can credibly host a financial leviathan without endangering its taxpayers.
Earlier this month, IMGlobalWealth.com flagged the same dilemma in ‘A Colossus in Alpine Shoes: UBS and Switzerland’s Regulatory Crossroads’⁵. That report highlighted proposals to force UBS to raise as much as $26bn in additional capital, lifting its common equity tier-1 ratio towards 17% from 14.3%.
The package, to be phased in over six to eight years, reflects a political determination to prevent a repeat of the Credit Suisse debacle.
UBS has warned the measures are excessive, particularly the planned treatment of foreign subsidiaries, which it says could hobble competitiveness in wealth management and investment banking⁶.
The bank insists it already maintains loss-absorbing capacity several times greater than its 2008 crisis losses⁷.
FINMA’s verdict underscores the same paradox flagged by IMGW: UBS may now satisfy the formal requirements of resolvability, but until Switzerland buttresses the legal and political framework, the “too big to fail” problem remains unresolved.
Sources
- FINMA Resolution Report 2025
- Financial Times: UBS emergency plan is not ‘executable’
- Reuters: Swiss regulator says UBS emergency plan still needs work
- Reuters: Former Swiss finance minister warns about size of UBS
- IMGlobalWealth.com: A Colossus in Alpine Shoes
- Financial Times: Swiss capital proposals for UBS face pushback
- UBS Open Letter on Swiss Banking Reform (2025)
