The competencies of FINMA in the area of recovery and resolution differ depending on the supervisory area. They include preventive supervision, intervention in acute crises and the resolution of solvent or insolvent companies. FINMA can initiate recovery and resolution measures at licensed and non-licensed institutions, at group holding and significant group companies of banking and insurance groups.
FINMA authorises and supervises financial intermediaries on the Swiss financial markets. If a financial intermediary fails or operates without a licence, it is responsible for ensuring an orderly market exit by means of a liquidation or insolvency. FINMA will support any recovery efforts by the institution and examine whether a restructuring is likely to be successful as an alternative.
Banks, insurance companies, asset managers, financial market infrastructures and other financial market participants can become so large at a national or international level that their disorderly failure could undermine financial stability and force a de facto government bail-out funded by the taxpayer. Following the global financial crisis of 2007 and 2008, the “too big to fail” problem was therefore addressed both in Switzerland and abroad.
FINMA regularly assesses the recovery and emergency plans as well as the resolvability of systemically important Swiss banks and financial market infrastructures. FINMA publishes this assessment as part of its annual Resolution report. This publication has created transparency both for supervised institutions and the wider public about the current state of emergency planning and resolution strategies for systemically important financial market players.
Deposits held at licensed banks or securities firms, policyholders’ claims in the event of an insurance company’s insolvency, assets held in collective investment schemes as well as investments in Swiss Pfandbriefe enjoy special legal protection and are subject to specific provisions. FINMA monitors compliance with these provisions and the implementation of any resulting measures.
To inform creditors, FINMA publishes notices of restructuring and bankruptcy proceedings and orderly liquidations it has initiated and supervised. FINMA also publishes lists with the names of significant group companies and conglomerates:
FINMA reserves the right to keep lists of other significant group companies at any time.