UBS recovery, emergency plans to be revised due to Credit Suisse takeover

In its assessment of UBS‘s resolvability as at 31 December 2023, the Swiss Financial Market Supervisory Authority FINMA determined that the integration of Credit Suisse had created obstacles. FINMA is of the opinion that if the preferred restructuring strategy were to be applied, UBS could be resolved today by means of “single point of entry” recapitalization. UBS continues to fulfil the requirement for loss absorption capacity. However, due to the integration, it must harmonize the group structures, processes and IT platforms. The identified obstacles are currently being overcome by means of manual data aggregation until all processes function as automatically as possible again and the data is transferred to the strategic systems. At the same time, the current resolution strategy for UBS only provides for the continuation of business activities as part of a restructuring of the business model. Based on the experience of the Credit Suisse crisis, additional options for action are required to further strengthen crisis preparations and resolution planning for systemically important banks. Accordingly, FINMA also expects UBS to review its recovery and emergency plans. It has therefore suspended the annual assessment of these plans for 2024.