Experience with the small banks regime

FINMA pursues a range of initiatives so that it can ensure that implementation of banking regulation is structured as proportionately as possible. The small banks regime exempts banks and securities firms in categories 4 and 5 that are particularly liquid and well capitalised from certain supervisory requirements.

Overall, the small banks regime has established itself well in the year under review. With 57 participating banks, the number has fallen slightly since its introduction.

The initial experience since the introduction of the small banks regime on 1 January 2020 was selectively analysed in 2021. There were no acute weaknesses that had to be rectified until the regular ex-post evaluation of the new rules. Potential improvements were identified in the area of communication, for example with regard to the precise scope of the exemptions. FINMA’s analysis also indicated the key importance of a dynamic analysis of the small banks regime. In the future, for example, further possible exemptions should be considered when developing or updating the regime. There were no indications that there needs to be a change in the eligibility criteria for the small banks regime. The most important findings of the analysis were discussed with the sector at the Small Bank Symposium in January 2022.

The good establishment of the small banks regime is all the more encouraging because it had to be implemented in the middle of the coronavirus pandemic in a difficult environment. It should be noted that due to altered client behaviour as a result of the pandemic, some banks had difficulty meeting the simplified leverage ratio requirements, due in particular to the increased inflow of client funds. FINMA engages in an ongoing dialogue with the industry so that these specific developments can be taken into account and suitable solutions found.


(From the Annual Report 2021)