UBS must revise emergency plans after Credit Suisse deal

UBS Group will need to revise its recovery and emergency plans following the takeover of Credit Suisse, according to the Swiss financial regulator on Tuesday.

The Swiss Financial Market Supervisory Authority - Finma - said it has suspended approval of UBS's recovery and emergency plans, after determining that they will need "adjustments by UBS to ensure continued resolvability".

In March 2023, UBS agreed a USD3.25 billion emergency takeover of its local rival, amid pressure from the Swiss government due to fears that a failure of Credit Suisse would cause a global financial crisis.

Finma continued: "The events surrounding the Credit Suisse crisis have revealed the extent to which recovery plans need to be improved. The measures must be capable of being implemented more quickly and independently of each other and communicated in a targeted manner with as few negative effects as possible."

The regulator said that UBS's emergency plan must ensure the Swiss entity can continue its systemically important operations with no interruption "even if there is a risk of insolvency".

The emergency plan will need a "thorough" revision following the integration of Credit Suisse, it added. Finma noted in particular the need to reconsider liquidity planning and refinancing the Swiss entity should the emergency plan be put into place.