After the Credit Suisse Takeover: What Has Changed in Swiss Bank Regulation

In March 2023, UBS took over Credit Suisse in an emergency rescue orchestrated by the Swiss federal government, triggered by the preceding collapse of Silicon Valley Bank in the US. Three and a half years later, the political review is largely complete, and Swiss bank regulation has changed as a direct result: new capital requirements for UBS, a parliamentary inquiry, and a law on state liquidity assistance that remains unfinished.

What happened in 2023: a brief recap

Silicon Valley Bank ran into liquidity trouble in early March 2023 because it had invested a large share of client deposits in long-dated US government bonds. Rapidly rising interest rates had pushed down their market value. When the bank had to realise losses to cover client withdrawals, a bank run followed, and US deposit insurance closed it down.

The news from the US hit a Credit Suisse that had already been struggling with lost confidence and persistent outflows since 2022. Within days, outflows accelerated so sharply that the Swiss National Bank pledged liquidity support. That was not enough to restore confidence. On 19 March 2023, the federal government, FINMA and the Swiss National Bank agreed with UBS and Credit Suisse on a takeover, relying on emergency law because the authorities judged that an orderly bankruptcy proceeding would have triggered an internationally destabilising event.

What the inquiry found

Parliament subsequently set up a Parliamentary Investigation Committee (PUK), the first in decades. It questioned 79 people and reviewed more than 30,000 pages of files. The report was published on 20 December 2024.

The PUK concludes that the Federal Council, FINMA and the Swiss National Bank prevented an internationally destabilising financial crisis in spring 2023. It places the main responsibility for the collapse squarely on Credit Suisse: the institution had taken on excessive risk for years, produced repeated scandals, and resisted FINMA’s corrective measures. At the same time, the PUK criticises the authorities, most sharply the then Federal Department of Finance, which it judged to have delayed the provision of liquidity assistance. In its response, FINMA welcomed the recommendation to give it additional supervisory powers.

What has changed in regulation

The lesson drawn from the PUK inquiry is a fundamental overhaul of the too-big-to-fail rules, the provisions that require systemically important banks to hold additional capital and put organisational measures in place so they can be wound down in an emergency without state support. Since the takeover, UBS is the only globally systemically important bank headquartered in Switzerland; Zürcher Kantonalbank, Raiffeisen and PostFinance are additionally domestically systemically important.

On 22 April 2026, the Federal Council adopted the dispatch on the revision of the Banking Act. Its core element: systemically important banks will in future have to back their holdings in foreign subsidiaries fully with common equity tier 1 (CET1) capital, compared with around half today. A seven-year transition period is envisaged, and parliament will debate the bill starting summer 2026. The authorities estimate that the CET1 capital requirement at UBS’s parent bank will rise by around USD 20 billion. The effective capital gap is smaller: because the bank can offset existing capital buffers, it would have amounted to around USD 9 billion as of end-2025.

A second element remained unresolved: the Public Liquidity Backstop, a state liquidity facility for cases where the Swiss National Bank’s own options are exhausted. During the CS takeover, the federal government relied on emergency law for this; a regular law still does not exist today. The responsible Council of States committee has linked the deliberations to the larger too-big-to-fail bill and has postponed them, likely until end of 2026. UBS, Zürcher Kantonalbank, Raiffeisen and PostFinance would be affected.

What does this mean for bank clients today?

Deposit insurance and the segregation of custody assets, the two mechanisms that concretely protect a client if a bank fails, have remained untouched by the debate over big banks. Both apply unchanged and regardless of an institution’s size: details in What FINMA supervision protects for private clients.

What is changing is the probability that such a scenario occurs at all, and how orderly the process is if it does. Higher capital requirements lower the risk of a big bank sliding into an existential crisis. A regular Public Liquidity Backstop would make an orderly resolution easier in an emergency, instead of relying on emergency law. Both are the subject of ongoing legislation, not a finished state.

What role does an independent wealth manager play in a banking crisis?

An independent wealth manager typically does not run its own bank balance sheet holding client funds. Client assets sit with one or several custodian banks chosen by the client; the manager itself does not hold custody of them. Wealth managers therefore often work with several partner banks and regularly review whether a bank remains an appropriate place to hold custody. This affects how many institutions a portfolio can be spread across, but it removes neither the market risk of an investment nor deposit insurance: both apply unchanged, regardless of who manages the assets.

In the case of Credit Suisse, all client deposits were preserved through the orderly takeover. That is not an automatic outcome but the result of the instruments applied in that specific case, and it is exactly what the ongoing reform of capital requirements targets: strengthening the toolkit so that an orderly solution becomes more likely, without relying on emergency law.

A banking crisis also does not affect only the institution involved. Price movements can hit the securities of banks that had nothing to do with the original crisis, as seen in the share prices of European regional banks in March 2023. A wealth manager who monitors a portfolio continuously places such price movements in individual names in the context of the overall strategy, and distinguishes a short-term market reaction from a change in the underlying economic factors.

Key facts

• Takeover date: UBS took over Credit Suisse on 19 March 2023, relying on emergency law (source: Federal Council/FDF).
• PUK report: Published on 20 December 2024, after questioning 79 people and reviewing more than 30,000 pages. The PUK places the main responsibility for the collapse on Credit Suisse itself (source: parlament.ch).
• New capital rules: Federal Council dispatch of 22 April 2026, full CET1 backing of foreign subsidiary banks instead of around half today, seven-year transition period, parliamentary debate from summer 2026 (source: admin.ch).
• UBS capital requirement: The common equity tier 1 requirement at the parent bank rises by around USD 20 billion. The effective gap was around USD 9 billion as of end-2025, because existing buffers can be offset (source: admin.ch, dispatch of 22 April 2026).
• Public Liquidity Backstop: No regular law to date, deliberations in the Council of States likely postponed until end of 2026 (source: parlament.ch, FDF).

Frequently asked questions

What does ‘too big to fail’ mean for Swiss banks?

The term refers to institutions whose failure would endanger the national economy, which effectively forces the state to intervene in a crisis. Too-big-to-fail rules therefore require these banks to hold additional capital and put organisational measures in place so they can be wound down in an emergency without state support. Since the Credit Suisse takeover, UBS is the only globally systemically important bank headquartered in Switzerland (source: FINMA, FDF).

What did the Federal Council change in the capital requirements for UBS?

On 22 April 2026, the Federal Council adopted the dispatch on the revision of the Banking Act. Systemically important banks will in future have to back their holdings in foreign subsidiaries fully with common equity tier 1 (CET1) capital, compared with around half today. A seven-year transition period is envisaged, and parliament will debate the bill starting summer 2026 (source: admin.ch, dispatch of 22 April 2026).

Is the Public Liquidity Backstop already law?

No. The federal government relied on emergency law during the CS takeover in 2023, and a regular law for this state liquidity backstop still does not exist. The responsible Council of States committee has linked the deliberations to the larger too-big-to-fail bill and has postponed them, likely until end of 2026. UBS, Zürcher Kantonalbank, Raiffeisen and PostFinance would be affected (source: parlament.ch, FDF).

How did parliament’s inquiry committee assess the authorities’ conduct?

The Parliamentary Investigation Committee (PUK) concluded in its report of 20 December 2024 that the Federal Council, FINMA and the Swiss National Bank prevented an international financial crisis in spring 2023. It places the main responsibility for the collapse on Credit Suisse itself. The report criticises FINMA’s supervisory practice, as well as the Federal Department of Finance, which the PUK judged to have delayed the provision of liquidity assistance.

Are my account balances and securities protected at a large bank if it runs into difficulty?

Account balances are covered up to CHF 100,000 per client and bank through deposit insurance, regardless of the institution’s size. Securities held in custody count as segregated assets and do not form part of any bankruptcy estate. Both mechanisms in detail: What FINMA supervision protects for private clients.

What does an independent wealth manager change in the event of a banking crisis, and what doesn’t it change?

An independent wealth manager does not run its own bank balance sheet holding client funds and typically works with several custodian banks, which allows a portfolio to be spread across different institutions. None of this removes the market risk of an investment or replaces deposit insurance: both apply unchanged, regardless of who manages the assets.