On Mar. 27, SWI FINMA issued ordinances implementing Basel III.
SWI FINMA published 5 ordinances to implement final Basel III standards in SWI.
Contain implementing provisions for the capital adequacy ordinance (CAO) for banks.
Follows SWI GVT Nov. 2023 adopted amendment of Own Funds Ordinance (CAO) for banks, transposing final Basel III standards of BCBS into Swiss Law, see #142534.
Background
Basel Committee published Basel III standards aiming for more risk-adequate capital requirements and better comparability of the capital ratios published by banks.
Calculation of minimum capital requirements based on internal models was restricted, standardized approaches designed to be more risk-oriented, e.g. re mortgage loans.
For Switzerland, the Federal Council primarily adopted these rules in the CAO.
SWI FINMA supports the introduction and application of final Basel III standards.
SWI GVT instructed FINMA to issue technical implementing provisions for various areas of the final Basel III standards, FINMA fulfills this mandate by issuing 5 ordinances.
These replace various FINMA circulars and will enter into force on Jan. 1, 2025.
Provisional Ordinances
Ordinance on the trading book and banking book and eligible capital of banks and securities firms (HBEV-FINMA) replaces FINMA circular 2013/1Eligible capital - banks.
Regulates technical aspects of initial allocation of positions to trading and banking book, modalities for changes, in allocation, transfer of risks between the two books.
Ordinance on leverage ratio and operational risk of banks and securities firms (LROV-FINMA), replaces circular 2015/3Leverage ratio-banks, parts of circular 2008/21.
Governs slightly revised calculation of total exposure as basis for calculating leverage ratio, detailed definition of income and expenses re operational risk minimum capital.
Ordinance on the credit risks of banks and securities firms (KreV-FINMA), replaces circular 2017/7, re minimum capital requirements for credit value adjustment risks.
Revised version of previous current exposure method designed for small banks for calculating credit value of derivatives, IRB requirements, and standardized approach.
Ordinance on the market risks of banks and securities firms (MarV-FINMA), replaces circular 2008/20Market risks - banks, regulates calculation of minimum capital requirements for market risks according to standardized approach, model approach.
As well as simplified standardized approach as slightly adapted version from earlier.
Ordinance on the disclosure obligations of banks and securities firms (OffV-FINMA), replaces circular 2016/1, with new and revised disclosure tables re risks/capital.
Effectiveness
All the ordinances will come into force on Jan. 1, 2025.
In Mar. 2024, SWI SBA updated self-regulation on mortgage lending, see #206542.
In Jun. 2024, SWI GVT confirmed Basel III implemented Jan. 1, 2025 see #217181.
In Dec. 2024 SWI FINMA issued new supervisory notice on loss events, see #237214.
