The aim of FINMA’s formal assessment is to identify weaknesses and work out a risk rating. FINMA assesses banks in supervisory categories 1 and 2 every year and those in category 3 at least every two years.
Basis of the assessment
FINMA bases its assessment on information collected through supervision during the year: reports from internal auditors and the audit firms, annual reports, etc. It also factors in its own view of regulatory, economic and business developments.
Outcome and need for action
After completing its formal assessment, FINMA sends the bank an assessment letter detailing the risk rating, any weaknesses that have been identified and the action that needs to be taken. The bank can respond to this in writing.
Under certain circumstances, an assessment letter can lead to supervisory measures such as in-depth investigations as part of an on-site supervisory review