Switzerland: Financial System Stability Assessment

International Monetary Fund

No 2025/266, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper presents the Financial System Stability Assessment report for Switzerland. The Swiss financial system is large, sophisticated, and of global importance, especially through its asset and wealth management services. It has faced significant challenges since the last financial sector assessment program, most notably during the collapse of Credit Suisse, its second largest Global Systemically Important Bank. Financial stability was preserved through exceptional government measures, which attracted intense public scrutiny and highlighted salient gaps in supervision and crisis management frameworks. Switzerland’s private sector leverage ranks among the highest globally and large real estate exposures pose systemic risks. Stress tests for banks and insurers indicate broad resilience to severe solvency and liquidity shocks. Once implemented, the authorities’ proposed reforms are expected to strengthen the Swiss Too-Big-To-Fail framework, bank governance, and crisis prevention and preparedness. In order to bolster supervisory effectiveness, the Swiss Financial Market Supervisory Authority needs enhanced legal powers, increased resources, and a more direct and intrusive approach. Heightened vigilance is needed in the areas of governance, risk management, market conduct, anti-money laundering/combating the financing of terrorism, and cyber risk, together with maintaining strong capital and liquidity buffers.

Keywords: C. bank stress testing; climate risk analysis; FSAP finding; bank solvency stress test result; bank liquidity; liquidity shock; work of the Financial Sector Assessment Program; Financial sector stability; Stress testing; Anti-money laundering and combating the financing of terrorism (AML/CFT); Systemic risk; Global (search for similar items in EconPapers)
Pages: 58
Date: 2025-09-16
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