Switzerland: Detailed Assessment of Compliance-Basel Core Principles for Effective Banking Supervision

IMF Staff Country Reports, September 3, 2014

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Significant portions of guidance and legislation related to qualitative risk management and control standards are not as detailed or comprehensive as in many other major countries and need to be updated and selectively strengthened.
Supervisory risk assessments and guidance to auditors, as the extended supervisory arm of the Swiss Financial Market Supervisory Authority (FINMA), need to be further materially improved, beyond what is now envisioned.
Additional skilled resources within FINMA are necessary to meet these goals and to conduct more on-site supervisory work.
The responsibilities and objectives of FINMA that emphasize protecting creditors, investors and insured persons, as well as ensuring proper functioning of the financial market, should be clearly stated in legislation as pre-eminent.
The Board’s involvement in supervisory decisions should be clarified and limited; the conflict code should be improved.

Update and selectively strengthen guidance and legislation related to qualitative risk management and control standards.
Further materially improve supervisory risk assessments and guidance to auditors acting as FINMA’s extended supervisory arm.
Increase FINMA resources, especially for on-site inspection and risk expertise.
Clarify and limit cases in which the Board can become involved in supervisory decisions.
Improve the conflict code applicable to FINMA governance.

Subject areas: Auditing, Banking, Credit risk, External audit, Financial regulation and supervision, Market risk, Operational risk, Public financial management (PFM).
Keywords: audit firm, audit strategy, Auditing, banking group, central bank, CR, Credit risk, External audit, financial market, Global, internal audit, ISCR, Market risk, Operational risk, risk management, risk profile, senior management.

_cr14264 — Executive Summary, Key Findings and Recommendations
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- _cr14264 — Executive Summary, Key Findings and Recommendations (PDF)