Note from the Editors | Strengthening the “Too Big to Fail” Regime in Switzerland

Share on:

The collapse of Credit Suisse in March 2023 has served as a powerful catalyst for a renewed and intensified debate on the effectiveness of Switzerland’s ‘too big to fail’ (TBTF) regulatory framework. In response, the Swiss Federal Council has presented a comprehensive package of measures aimed at strengthening banking stability and mitigating the risks posed by systemically important banks in a report on banking stability in April 2024. The Federal Council also emphasized that Switzerland should remain one of the world’s leading financial centers with a stable and competitive financial sector. In June 2025, the Federal Council presented the key points for the amendment of the Swiss Banking Act. The first specific proposals, demanding that systemically important banks in Switzerland would be required to provide full capital backing for their participations in foreign subsidiaries, were published on 26 September 2025 and are subject to consultation until 9 January 2026.

1) Overview on Proposed Measures

According to the Federal Council, the TBTF legislative framework should be expanded with a package of measures aimed at significantly reducing the risks for the state, the national economy, and Swiss taxpayers. The envisaged reforms are concentrated in three main areas:

a) Strengthening Prevention

The goal is to ensure that a systemically important bank can absorb losses with its own funds and continue to operate, or be wound down without state intervention. Key measures include:

– the strengthening of corporate governance, e.g. by introducing more detailed requirements and a senior managers regime “light” to clarify responsibilities, 

– increased capital requirements, with a focus on foreign participations within a financial group and forward-looking elements incorporated into capital surcharges and 

– regulation on compensation by strengthening the legal basis, particularly concerning variable components as well as 

– expansion of FINMA’s supervisory powers, for example, by making it easier to obtain information and by giving FINMA the power to issue fines.

b) Strengthening Liquidity

This area focuses on ensuring banks have sufficient liquidity and that the central bank has effective tools to provide liquidity in a crisis. The proposals include introducing the Public Liquidity Backstop (PLB) in ordinary law to ensure systemically important banks have access to sufficient liquidity in a crisis and tightening requirements for banks to provide information about their liquidity situation to the supervisory authority.

c) Expanding Crisis Toolkit

This involves expanding the range of options available for resolving a failing bank. The measures aim to introducing more options for an orderly wind-down of a bank, e.g. by requiring a resolution plan for parent banks or providing for an orderly wind-down as a resolution option, and further increase the legal certainty of a bail-in, where the bank’s owners and creditors bear the losses.

2) Focus of the current CapLaw issue 5/2025

This issue of CapLaw delves into three key proposals that form the cornerstone of this reform effort: enhancing FINMA’s early intervention powers, increasing the accountability of senior management, and granting the regulator the authority to impose fines.

– Nina Reiser kicks off the discussion by examining the proposal for a more robust early intervention regime for all banks. Her article outlines the critical need for FINMA to act proactively before an institution is at risk of insolvency. 

– Nicolas Curchod and Dusan Ivanovic address the sensitive topic of individual accountability with their analysis of a potential ‘Senior Managers Regime’. Adopting a “less is more” approach, they argue against transposing the complex British model wholesale. Instead, they propose targeted amendments to existing FINMA circulars and recommend two interconnected documents, a “Responsibilities Map” to clearly delineate tasks and powers within the organization as well as an individual “Statement of Responsibilities” for each senior manager. This approach, they contend, would enhance accountability and facilitate enforcement without creating a burdensome new legislative framework.

– Claudio Bazzani and Reto Ferrari-Visca explore the highly debated proposal to grant FINMA the power to impose fines. They weigh the arguments for – such as increased deterrence and alignment with international standards – against the significant arguments against, including the risk of procedural complications and a potential shift in FINMA’s supervisory culture from cooperative to punitive. While acknowledging the political momentum, they conclude that if such powers are introduced, they should be narrowly circumscribed and, in line with the Federal Council’s latest proposal, primarily target legal entities rather than individuals to avoid constitutional and practical hurdles.

Together, these contributions offer a comprehensive and critical perspective on the path forward for Swiss banking regulation, highlighting the complex balancing act between enhancing stability, ensuring accountability, and maintaining an effective and efficient supervisory model.

The Editors

Discover more articles

We provide up-to-date information on legal and regulatory developments regarding the capital markets, publish concise articles on developments in the Swiss and international financial markets, and announce recent deals and forthcoming events.

  • New White Paper on SIX IPOs Presented at January 2026 Tech IPO Event

    At an event held in January 2026 at the premises of SIX Swiss Exchange, a new white paper was presented that sets out the advantages of conducting an IPO in Switzerland as opposed to the United States. This contribution focuses on legal aspects covered in the white paper.


  • Successful SME Listings: Regulatory Design and Market Structure in Sweden 

    The Swedish market has established itself as one of Europe‘s leading stock markets, and in December 2025, The Economist declared Stockholm “Europe‘s new capital of capital.” In 2025, Sweden accounted for more IPOs than any other country in Europe and, in absolute terms, had the highest number of listed companies in Europe even though Sweden, with a population of around ten million, ranks only eighth in the EU in terms of GDP.


  • Proposal for a Sustainable Corporate Governance Act

    On 1 April 2026, the Federal Council introduced the draft Sustainable Corporate Governance Act as a counterproposal to the Responsible Business Initiative 2.0. The proposed legislation seeks to align Swiss law with the latest amendments to corporate sustainability regulations in the EU by instituting broadly framed sustainability due diligence obligations and enhanced sustainability reporting requirements for large to very large Swiss companies. In addition, the draft outlines the creation of a special liability framework and introduces supervisory mechanisms to ensure compliance.


  • FINMA‘s Expectations in Terms of Consolidated Supervision: the FINMA Circular 2025/4 and Beyond

    On 1 July 2025, FINMA Circular 2025/4 on consolidated supervision entered into force. This codification of FINMA‘s longstanding supervisory practice for financial groups in line with international standards enhances regulatory clarity. One year after its entry into force, it makes sense to assess the Circular‘s practical impact and the extent to which consolidated supervision has featured in FINMA‘s recent practice. As this issue will likely remain relevant in the coming years, this contribution examines FINMA‘s expectations as set out in the Circular and as applied in practice.


  • Infracore‘s Initial Public Offering on SIX

    On 9 July 2026, Infracore SA, Switzerland‘s leading specialist in healthcare real estate, successfully completed its initial public offering on SIX Swiss Exchange. Priced at CHF 54 per share, the IPO consisted of 4,209,203 firm shares, comprising 3,703,703 newly issued shares and 505,500 existing shares sold by Infracore‘s largest shareholder, MPT Switzerland Holdings S.à r.l., and an over-allotment option of up to 420,920 existing shares granted by MPT, exercisable on or before 8 August 2026. Trading in the shares on SIX started on 9 July 2026. Based on the offer price of CHF 54 per share, the aggregate offer size (assuming the over-allotment option is exercised in…


  • SOPHiA GENETICS‘s Public Offering of USD 57.5 Million of Ordinary Shares

    On 19 June 2026, SOPHiA GENETICS (Nasdaq: SOPH), a global leader in AI-driven precision medicine, closed its underwritten public offering with total gross proceeds of USD 57.5 million. TD Cowen acted as the lead book-running manager for the offering. Guggenheim Securities acted as book-running manager, and BTIG and Craig-Hallum acted as lead managers for the offering.