Switzerland Proposes Sweeping Post-Credit Suisse Banking Reforms

Swiss federal authorities announced in August that they had opened consultation on proposed changes to the Banking Act and Liquidity Ordinance rules following the 2023 Credit Suisse crisis. The measures are the latest phase in a major ongoing regulatory overhaul that aims to strengthen the country’s too-big-to-fail framework.

Credit Suisse collapsed in March 2023 following what FINMA describes as years of strategic, governance, and risk-management failures and a crisis of confidence leading to over 110 billion CHF in panic withdrawals. This resulted in record losses for the company, ultimately leading to its primary backer, the Saudi National Bank, withdrawing further financial assistance and triggering an immediate liquidity crisis. UBS, now Switzerland’s largest bank, then completed its takeover, absorbing its operations and retiring the brand name.

The Swiss authorities’ proposed changes say that banks with 250 or more employees would have to document who is responsible for particular decisions. The government also stated that having clearer divisions of responsibility would allow banks and FINMA—the country’s independent banking regulator—to take targeted action when breaches occur. Moreover, banks would be required to design renumeration around long-term performance and risk, while senior and highly paid managers at systemically important banks would face bonus retention periods and clawback provisions.

The new rules would also give FINMA stronger early-intervention powers when risks emerge, including the possibility of imposing fines on institutions and penalties for delayed compliance with supervisory orders. The goal is to establish a more proactive approach by making banks’ recovery and resolution plans clearer, tougher, and more specific. The proposed changes would also make it easier for banks to prepare collateral for accessing Swiss National Bank liquidity during periods of economic stress.

The proposed changes have nonetheless faced pushback, with the Swiss Bankers Association arguing that the proposals go too far and questioning the broader expansion of FINMA’s authority. In a statement, the organization claimed that “the crisis at a single bank does not justify across-the-board tightening of regulations for other banks.” Instead, they say, regulation should focus on areas where real risk exists and where it makes a verifiable contribution to the country’s financial stability.

The operational implications of the proposed changes are such that executive responsibility will likely require banks to maintain reliable records of ownership, decisions, controls, and escalation. In terms of tangible operational changes, that means implementing improved compensation systems and governance and risk-reporting workflows. Regulatory data will, as a consequence, need to become more interconnected.

As far as the international banking community is concerned, the Swiss proposals reflect a broader global shift toward individual accountability, where stronger governance requirements typically translate into technology requirements. Compensation is also becoming part of that risk architecture, especially as regulators around the world increasingly treat remuneration as a tool to discourage excessive risk-taking. Ultimately, Switzerland’s proposals offer an important warning for fast-growing fintechs as they become more interconnected and bank-like and, therefore, regulated more like traditional banks.