Supervision of small banks 2022

FINMA is committed to proportionate regulation and risk-based supervision. It is pursuing several initiatives to make banking regulation and supervision in its area of responsibility as proportionate as possible, and it is also committed to a proportionate approach in overarching regulation.

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. During the reporting period, 54 banks and securities firms – approximately 20% of the institutions in these categories – participated in the small banks regime.

Initial experience and challenges in connection with the introduction of the small banks regime in January 2020 were discussed with the industry at the Small Bank Symposium on 24 May 2022. Although no acute shortcomings were identified, certain opportunities for improvement were suggested, such as a better overview of all exemptions or further exemption opportunities for the small banks. Overall, the dynamic further development of the small banks regime also remained a key issue for the small banks. Accordingly, potential further exemptions should also be considered in future when developing or updating regulatory requirements, both specifically for the small banks regime and generally in line with the proportionality principle for smaller banks. FINMA continued to discuss this in a regular constructive dialogue with the industry in the reporting period.

FINMA’s supervisory activities in the year under review were data-driven and risk-based, particularly in the case of small banks. Consequently, supervisory tools such as supervisory discussions or on-site supervisory reviews were used to a reduced extentent for institutions with lower risks. By contrast, FINMA used specific case management, among other things, in the event of critical events and problematic developments, also at small banks.

(From the Annual Report 2022) 

Annual Report 2023

Updated: 20.03.2024 Size: 2.63  MB
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