On Dec. 13, SWI FINMA issued new supervisory notice on loss events.
SWI FINMA issued Supervisory Notice 07/2024, of Dec. 13, 2024, entitled Calculation of minimum capital for operational risks: exclusion of loss events, on calculation basis.
Follows SWI FINMA Mar. 2024 issued ordinances implementing Basel III, see #206530.
Notice Overview
From Jan. 1, 2025, minimum capital requirements for operational risks are calculated according to Capital Adequacy Ordinance of Jun. 1, 2012, and SWI FINMA Ordinance of Mar. 6, 2024 on Leverage Ratio and Operational Risks of Banks and Securities Firms.
These can be quoted as the CAO (SR 952.03) and as LROO-FINMA (SR 952.033.11).
The ordinances contain requirements and implementing provisions for a standardized approach for calculating all of the minimum capital requirements for operational risks.
In particular, for the business indicator, business indicator component, internal loss multiplier and loss component, as are required to be calculated by relevant institutions.
Banks may exclude loss events that are no longer relevant from the calculation of the loss component if certain requirements are met (under Art. 93a paras. 3 and 4 CAO).
This guidance sets out these requirements and examples and refers to the relevant implementing provisions from the explanatory notes to the final Basel III standards.
However, any such exclusion must be clearly justified and of an exceptional nature.
Effectiveness
Guidance document applies from publication, on Dec. 13, 2024, with the new relevant minimum capital requirements for operational risks, now applicable from Jan. 1, 2025.
Regulators
SWI FINMA
Entity Types
Auditor; Bank; BHC
Reference
Gd, Nt 07/2024, 12/13/2024; CAO (SWI); LROO-FINMA (SWI)
