Swiss regulator rejects PostFinance too-big-to-fail plans

Finma rejects PostFinance's emergency plan Keystone-SDA

The Swiss Financial Market Supervisory Authority (Finma) has rejected contingency plans from too-big-to-fail bank PostFinance, which are designed to mitigate the damage of possible bankruptcy.

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The verdict on UBS’s crisis plan will be given later this autumn.

PostFinance does not currently have sufficient and adequate capital to cover losses if the emergency plan is activated, Finma explained in a statement on Thursday.

+How to tame UBS without making the bank toothless

In other words, its recapitalisation capacity is deemed insufficient, a shortcoming that the financial arm of the Swiss Péost Office recognised in 2024 and undertook to remedy by the end of 2025.

The bank must also make further progress in “improving its optionality” in the event of a crisis, according to Finma. The bank must be able to present, among other solutions, a so-called alternative strategy for maintaining its systemically important functions if restructuring is not possible.

The contingency plans of Raiffeisen and Zurich Cantonal Bank are deemed to comply with regulatory requirements.

As for the stabilisation plans, in which the banks present measures to stay afloat for the long term in the event of a crisis, so that they can continue to operate without state intervention, all the banks have passed the test.

Finma will issue a separate press release on UBS’s crisis planning in autumn 2025.

Each year, systemically important banks must submit a stabilisation plan and a contingency plan to Finma for assessment, in which they demonstrate how critical functions can be maintained in the event of insolvency risk.

These functions are short-term credit operations (except for PostFinance), deposit operations and payment transactions.

Translated from French by DeepL/mga

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