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Julius Baer seriously breached risk and money laundering rules, Swiss regulator says - Finance news and analysis from Global Banking & Finance Review
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Julius Baer seriously breached risk and money laundering rules, Swiss regulator says

Published by Global Banking & Finance Review

Posted on September 29, 2026

2 min read

· Last updated: September 29, 2026

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Swiss Regulator FINMA: Julius Baer Violated Money Laundering and Risk Rules

FINMA Investigation and Findings

Overview of FINMA's Enforcement

ZURICH, Sept 29 (Reuters) - Swiss private bank Julius Baer committed serious violations of supervisory provisions related to risk management and anti-money laundering obligations, financial regulator FINMA said on Tuesday, after concluding its investigation.

Scope of the Inquiry

The inquiry was related to private debt loans to a European group and client relationships tied to two Russians who were described as politically exposed.

History of Regulatory Actions

It was the fifth enforcement proceeding carried out by FINMA against Julius Baer in less than 10 years, the authority said.

Details of Violations

Deficient Risk and Compliance Culture

"There were significant breaches which revealed a deficient internal risk and compliance culture within the bank," added the authority, which ordered Julius Baer to hold additional capital of 250 million Swiss francs ($300 million) until it completes a planned divestment of incompatible clients.

Private Debt Loans to European Group

From September 2019, Julius Baer granted loans in its new private debt business to a European group and its founder, with the exposure eventually exceeding 1 billion Swiss francs.

Ignored Warning Signs and Risk Limits

The bank ignored numerous warning signs, breached its own risk limits and facilitated opaque transactions that meant the exposure of 586 million francs outstanding at the end of 2023 ultimately had to be written down in full, FINMA said.

Anti-Money Laundering Failures

Separately, the bank failed to adequately scrutinize the origin of assets for high-risk clients linked to two Russian politically exposed persons (PEPs) over several years, breaching anti-money laundering reporting obligations, FINMA said.

Additional Information

($1 = 0.8333 Swiss francs)

(Reporting by John Revill, Editing by Miranda Murray)

Key Takeaways

  • FINMA identified major deficiencies in Julius Baer’s risk‑management, private‑debt lending and AML controls, noting full write‑down of CHF 586 million exposure (juliusbaer.com)
  • This is FINMA’s fifth enforcement action against Julius Baer in under a decade, underlining recurring compliance issues (finma.ch)
  • The regulator imposed an additional CHF 250 million capital buffer until the bank divests incompatible clients, signaling serious supervisory concern (juliusbaer.com)

References

Frequently Asked Questions

What rules did Julius Baer allegedly breach?
Julius Baer breached supervisory provisions related to risk management and anti-money laundering obligations.
Who conducted the investigation into Julius Baer?
The investigation was conducted by Switzerland’s financial regulator, FINMA.
What penalties did Julius Baer face?
FINMA ordered Julius Baer to hold an additional 250 million Swiss francs in capital until it completes specified client divestments.
Why was scrutiny applied to Julius Baer's Russian clients?
The bank failed to adequately vet high-risk clients linked to two Russian politically exposed persons, breaching anti-money laundering reporting obligations.
How many FINMA enforcement actions has Julius Baer faced in the past decade?
It was the fifth enforcement proceeding against Julius Baer by FINMA in less than ten years.

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