IFLR Regulatory Capital Survey 2013

Author:Mr Patrick Vogel and Adriano Antonietti
Profession:Froriep
 
FREE EXCERPT

SECTION 1: BASEL III IMPLEMENTATION

1.1 How advanced is Basel III implementation in your jurisdiction?

Basel III implementation is essentially complete. Deadlines for its introduction have or are near to being met. In June 2013, the Basel Committee on Banking Supervision issued its report on the assessment of Basel III regulations for Switzerland. As indicated in the report "(t)he adoption of Basel III-based capital rules in Switzerland was completed during 2012".

Indeed, the amendments to the ordinances issued by the Swiss Federal Council and the related circulars of the Swiss Financial Market Supervisory Authority (FINMA) have been adopted in 2012, entered into effect as from January 1 2013 and, taking into account their transitional periods of application, should be fully applicable at the end of 2018.

On October 28 2013, the FINMA released the amended versions of Circular 08/19 'Credit risks - banks', Circular 08/20 'Market risks - banks', Circular 08/22 'Capital adequacy disclosures - banks', and Circular 13/1 'Eligible equity capital - banks' which have been slightly revised to correspond to the implementation of the Basel III regime. The respective changes shall enter into force on 1 January 2014.

1.2 To what extent is local implementation expected to be more stringent than Basel III requires?

Basel III will be implemented in accordance with Basel III requirements with a moderate Swiss finish. The Swiss capital adequacy regime sets different minimum capital thresholds based on different categories of banks, classified by their size and importance. In Switzerland, the lowest thresholds set by the Basel III regulations apply only to the smallest banks.

1.3 Is it expected that the leverage ratio could be implemented in your legislation sooner than the official Basel III timetable requires?

It is anticipated that the timeframe for implementation of the leverage ratio will follow the timeframe required by Basel III.

1.4 Have specific additional rules and regulations been issued in relation to Systemically Important Banks?

Yes, final rules and regulations have been published and are in force. Following the report of a commission of experts appointed by the Swiss Federal Council to (i) define the notion too big to fail, (ii) review the consequences of the bankruptcy and liquidation of large Swiss companies (including banks) and (iii) formulate propositions to limit such risks for the Swiss economy, specific rules have been adopted and implemented in Switzerland....

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