Swiss regulator says UBS emergency plan still needs work

ZURICH (Reuters) -A crisis plan for UBS still needs more work as authorities need more options for winding up or restructuring the bank in an emergency, which must be addressed by parliament, Switzerland's financial market regulator said on Thursday.

Switzerland is overhauling financial regulations after the 2023 collapse of Credit Suisse, which was taken over by bigger rival UBS. The government has proposed stricter measures for UBS to avoid a repeat of the Credit Suisse meltdown and to shield taxpayers from losses.

FINMA said further progress had been made to resolve a potential crisis at UBS and it continued to believe this could be achieved. But the regulator added there must be “greater optionality” for authorities, requiring legislative changes.

EMERGENCY PLAN WOULD BE FOR AN EXTREME SCENARIO

"UBS's emergency plan largely fulfils the current statutory requirements. However, it needs to be better integrated in the resolution plan in the future and thus cannot currently be regarded as executable," FINMA said.

UBS said it met the current requirements to be resolved under the preferred resolution strategy in the event of a crisis. As an additional safeguard, the bank said, the Swiss emergency plan would be available in an extreme scenario.

That plan is designed in line with legal requirements to ensure continuity and protection of systemically important functions in Switzerland, UBS said in a statement.

(Reporting by Dave Graham. Editing by Miranda Murray and Mark Potter)