Swiss regulator sees progress on UBS crisis planning, but work still to be done

ZURICH (Reuters) -UBS has made progress on its crisis planning but authorities need to have more options for tackling an emergency at the bank, Switzerland's financial market regulator FINMA said on Thursday.

Last October, FINMA said UBS needed to improve its emergency and recovery plans following the bank's government-engineered takeover of Credit Suisse, which collapsed in March 2023.

Since then, the bank's ability to restructure or wind up the business had improved, and UBS had made progress in remedying previously identified shortcomings, FINMA said.

The regulator said the bank's emergency plan - which sets out how systemically important functions would be maintained if broader efforts to revive or wind up the bank were unsuccessful - largely fulfils current statutory requirements.

But that emergency plan still needs to be better integrated in the resolution plan in the future and thus cannot currently be regarded as executable, FINMA said.

The regulator added there must be "greater optionality" for authorities, requiring legislative changes. The government has proposed stricter measures for UBS to avoid a repeat of the Credit Suisse meltdown and to shield taxpayers from losses.

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 Mark Potter, Kirsten Donovan)