Swiss Too-Big-to-Fail Reform: The 2026 Banking Act Consultation

ByRegReportingDesk

On 12 August 2026, the Swiss Federal Council opened a consultation on amendments to the Banking Act and the Liquidity Ordinance that would rewrite how the country supervises, disciplines and, if necessary, resolves its largest banks. The consultation runs until 19 November 2026, and it is the legislative core of the Swiss too-big-to-fail reform that the government promised after the Credit Suisse crisis. FINMA publicly welcomed the drafts the same day and pressed for the measures to move through Parliament as one package rather than piece by piece.

For a reporting or resolution-planning officer, the immediate point is that nothing in your current returns changes because of this consultation. What changes is the size of the preparation list. The drafts introduce a senior managers accountability regime, a power for FINMA to fine supervised entities, earlier intervention rights, additional resolution options, and requirements for in-scope banks to prepare assets legally and operationally for central-bank liquidity support. The Banking Act amendments could enter into force at the start of 2029 at the earliest. For the Liquidity Ordinance, the draft provides that the new preparation requirements must be met from 1 January 2033; its preparation-evidence reporting duty would begin earlier, within the transitional periods specified in the draft Liquidity Ordinance (earlier than the 1 January 2033 full-compliance date).

Scope is measure-specific. The enhanced recovery and resolution planning requirements and the additional remuneration deferral and clawback rules focus on systemically important banks, but other parts of the package extend further. The draft would apply general remuneration-system principles to all banks, and the proposed statutory duty of care for persons responsible for proper business conduct would also apply across all banks. The senior managers regime is proposed for banks with at least 250 full-time-equivalent employees, with FINMA able to impose it on smaller banks in individual cases; the proposed pecuniary administrative sanction can apply to supervised legal entities and partnerships; and the resolution-procedure amendments apply to all banks, with some changes extending to other supervised entities through cross-references. The Liquidity Ordinance preparation requirements apply to Swiss banks and Swiss subsidiaries of foreign banks in categories 1 to 3; categories 4 and 5, Swiss branches and representative offices of foreign banks, and account-holding securities firms are exempt from those preparation requirements.

Related reading: our guide to the UK Senior Managers and Certification Regime reforms, the accountability model Swiss drafters have studied closely.

The consultation calendar and the dates that follow it

Deadline pressure is the reason this topic matters now. The consultation is open for responses, and the later milestones remain the government’s stated plan, still subject to what Parliament decides.

  • 12 August 2026: Federal Council opened the consultation on the Banking Act and Liquidity Ordinance amendments.
  • 19 November 2026: consultation closes, written responses due.
  • 2027: Federal Council intends to adopt its dispatch and send the bill to Parliament.
  • 2029 at the earliest: the Banking Act amendments could enter into force.
  • 1 January 2033: the draft Liquidity Ordinance proposes that the new preparation requirements be met from this date.

The gap between a 2026 consultation and a 2029 commencement is wide, and it is easy to treat that distance as a reason to wait. The counterweight is that the accountability, remuneration and collateral-preparation measures each imply multi-year build work inside a bank, so the useful clock starts at the consultation, not at commencement.

Where the Swiss too-big-to-fail reform came from

The drafts implement two strands of official analysis. The first is the Federal Council’s own evaluation report on the too-big-to-fail regime, which set out where the framework needed strengthening. The second is the report of the Parliamentary Investigation Committee, known by its Swiss abbreviation PInC, into the conduct of the authorities during the Credit Suisse crisis. FINMA has said that it decided at the beginning of 2022 to seek new statutory powers and has argued publicly for that expansion ever since, so the consultation confirms a direction the supervisor has been requesting for years.

That lineage matters for how you read each measure. The package responds to gaps identified by the Federal Council and PInC following the Credit Suisse crisis, including issues concerning individual accountability, supervisory powers and collateral preparation for central-bank liquidity. Treating the reform as a coherent post-crisis response with a single thread, the manageable failure of a large bank, is the way to anticipate which drafts FINMA will defend hardest during the consultation. FINMA has emphasised the instruments with a preventive effect in particular, which is a useful signal of where the supervisor will resist any attempt to soften the drafts.

An accountability regime that names who owns each decision

The centrepiece for governance teams is a senior managers regime. Under the consultation, more complex banks, described as those with 250 or more full-time-equivalent employees, would have to define who is responsible for which decisions and set out a clear division of duties at the top of the house. The aim is to reinforce the personal responsibility of the individuals running the bank, so that a supervisory finding can be traced to an accountable person instead of dissolving into collective committee ownership.

The obvious comparison is the United Kingdom’s Senior Managers and Certification Regime, and Swiss drafters have clearly read it. The comparison is also where teams risk over-reading the Swiss text. The consultation draft is its own instrument built on the Banking Act, and it does not import the UK’s certification population, its prescribed responsibilities list, or its conduct-rules taxonomy wholesale. A Swiss group that already maintains UK statements of responsibilities has useful raw material, but it cannot assume the Swiss regime will accept the same documents unchanged. The safer working assumption is that a responsibilities map will need to be rebuilt against the Swiss categories once the final text is known.

Remuneration sits alongside the accountability regime. The draft would place general remuneration principles on risk mitigation and moral hazard at statutory level for all banks. For systemically important banks, additional rules would require partial deferral of variable remuneration for persons covered by the proposed responsibility provisions and persons with high total remuneration. The remuneration system would also have to permit reduction or cancellation of deferred variable remuneration and full or partial recovery of already-paid variable remuneration following breaches of applicable law or internal rules.

FINMA’s proposed fine power and a louder enforcement voice

Two enforcement changes stand out. The draft would create a pecuniary administrative sanction for a supervised legal entity or partnership that seriously breaches FINMASA or another financial-market act, capped at 10% of its annual operating income, averaged over a multi-year reference period as specified in the draft. FINMA’s current enforcement toolkit includes measures to restore compliance, disgorgement of unlawfully generated profits or avoided losses, industry and activity bans, publication of final rulings in specified cases and licence withdrawal, but it does not currently have this general fining power.

The second change would make public communication about final rulings in enforcement proceedings opened under Article 30 FINMASA the general rule. FINMA could refrain where overriding public or private interests oppose publication, including serious risks to financial-market stability or ongoing investigations. This goes beyond the current regime, under which FINMA generally does not communicate individual proceedings unless there is a particular supervisory interest and can publish final rulings under Article 34 FINMASA in specified circumstances.

Two qualifications belong on any internal summary of this section. First, the sanction is a proposed maximum expressed as a percentage of operating income over a reference period specified in the draft, not a flat figure, and it stays within administrative supervision; criminal matters continue to run through the prosecution authorities. Second, none of this is law yet. Until Parliament acts and the amendments commence, FINMA’s sanctioning toolkit is unchanged, and the correct present-tense description of its fining power is still that it lacks one.

Earlier intervention and more options in a crisis

For recovery and resolution teams, the consultation adds tools at both ends of the stress curve. On the preventive side, the drafts would let FINMA impose proportionate corrective measures where a breach of financial market law is imminent, ahead of the breach itself. That is a shift toward earlier, calibrated intervention, and it changes the evidentiary conversation between a bank and its supervisor well before a formal enforcement threshold is crossed. For internal preparation, firms may wish to preserve a clear governance and remediation trail around emerging supervisory-law risks; the consultation draft does not prescribe specific board-minute or remediation-tracking artefacts for this purpose.

On the crisis side, the drafts widen the set of resolution options available if an institution has to be stabilised or wound down in an orderly way. Switzerland already operates a restructuring and bankruptcy regime for banks under FINMA’s lead, and the reform is best read as deepening that toolkit rather than replacing it. Firms that maintain group recovery and resolution documentation should expect the assumptions in those plans, particularly around available stabilisation actions and their sequencing, to be tested against the expanded options once the framework is settled.

Practitioners tracking the parallel European debate will find the direction familiar. The mechanics differ, but the underlying goal of making large-bank failure manageable connects the Swiss package to work such as the Bank of England’s cross-border bank failure regime and to loss-absorbing-capacity frameworks like MREL reporting in the banking union. Reading the Swiss drafts with those comparators open helps separate genuinely novel Swiss features from the common post-2023 resolution vocabulary.

Liquidity: preparing collateral before the SNB is ever needed

The Liquidity Ordinance strand is where the operational lift is most concrete, and its preparation requirements have a measure-specific perimeter covering Swiss banks and Swiss subsidiaries of foreign banks in categories 1 to 3, subject to the draft’s exemptions. The draft would apply its general preparation requirements to Swiss banks and Swiss subsidiaries of foreign banks in categories 1 to 3, subject to the stated entity exemptions, requiring them to prepare assets legally and operationally for central-bank liquidity support; SIBs would additionally face quantitative minimum preparation requirements. At the legislative level, a related change would make it easier to transfer the necessary collateral to the Swiss National Bank, smoothing the mechanics that proved slow under stress. The preparation requirements cover collateralised central-bank liquidity, but assets prepared for a foreign central bank count only under the conditions in the draft Liquidity Ordinance, including links to liquidity risks in the relevant jurisdiction and, for excess amounts, the ability to transfer the resulting liquidity within the group under stress.

Proportionality is built into the sizing. Systemically important banks would face quantitative minimum requirements, while category 3 banks would be able to determine the volume of assets to prepare using the risk indicators set out in the Ordinance. Category 4 and 5 institutions are not caught by the Ordinance’s preparation requirements. FINMA’s supervisory category is relevant but does not by itself determine whether the collateral-preparation duty applies. The draft applies the preparation requirements to Swiss banks and Swiss subsidiaries of foreign banks in categories 1 to 3, while Swiss branches and representative offices of foreign banks and account-holding securities firms are exempt; categories 4 and 5 are also exempt from the regulatory preparation requirements. For an in-scope category 3 bank, the Ordinance’s risk indicators determine the volume to be prepared.

The preparation duty is operational, but the draft also creates a dedicated regulatory submission, the Vorbereitungsnachweis (preparation evidence form), to the SNB. Category 3 banks would submit it semi-annually and SIBs would submit it monthly, within the filing periods set out in the draft Liquidity Ordinance. FINMA would determine the form and content of the preparation evidence; it could impose special reporting obligations on banks with a significant volume of assets prepared for liquidity support from a foreign central bank, and could require a higher submission frequency in extraordinary circumstances. Audit firms would have to verify the preparation requirements and the correctness of the preparation evidence. The Vorbereitungsnachweis adds a distinct regulatory submission that sits outside existing LCR and NSFR returns and carries real collateral-operations and reporting demands. Preparing assets for central-bank liquidity support is about making them legally and operationally transferable at speed, closer in spirit to the funding-in-resolution work that resolution authorities elsewhere have pushed, such as the Single Resolution Board’s liquidity and funding in resolution guidance. Teams that map it onto their existing Liquidity Coverage Ratio reporting will underestimate the collateral-operations, custody and legal-transfer work involved. The SNB publicly welcomed the package, and its interest is precisely in whether banks can deliver eligible collateral fast enough for liquidity support to work.

The capital increase sits on a separate track

One clarification prevents a common conflation. The headline capital measure of the Swiss reform, the requirement that systemically important banks fully back their participations in foreign subsidiaries with common equity tier 1 capital, is not part of this Banking Act and Liquidity Ordinance consultation. The Federal Council has advanced the capital strand separately, including through a dispatch and amendments to the Capital Adequacy Ordinance. That track carries the large numbers that dominated the political coverage of the reform.

The consultation now open is the governance, supervision, resolution and liquidity package. Keeping the two strands distinct matters for internal reporting. The full CET1 backing of participations in foreign subsidiaries is in the separate Banking Act proposal adopted for dispatch on 22 April 2026. The 12 August package follows its own Banking Act and Liquidity Ordinance timetable: the statutory amendments could enter into force at the start of 2029 at the earliest, while the draft Liquidity Ordinance sets 1 January 2033 for meeting the new preparation requirements. A briefing note that folds the CET1 backing requirement into the August 2026 consultation will misstate both the legal basis and the calendar.

What to line up before 19 November

If the institution chooses to participate in the consultation, its response must be submitted by 19 November 2026; the consultation does not itself create a mandatory regulatory filing. Beyond that, the drafts point to workstreams worth scoping now, described here as preparation because the text is not final.

Governance and legal teams can begin drafting a responsibilities map against the Swiss senior managers concept and testing it against the proposed 250-full-time-equivalent threshold, while noting FINMA’s proposed case-by-case power to impose the regime on a smaller bank. Remuneration committees can review deferral and clawback provisions for readiness against a tightened standard for systemically important banks and check whether general remuneration principles in the draft align with existing policies. Treasury and collateral-operations teams can inventory eligible collateral and the legal and custody steps needed to move it to the SNB at speed. Recovery and resolution teams can pressure-test existing plans against wider stabilisation options and earlier supervisory intervention. A useful reference point for the recovery-plan side is the EBA recovery plan dry-run findings, which show the kinds of gaps supervisors surface when they stress a plan in practice.

Frequently Asked Questions

Does this consultation change any regulatory return we file today?

No. The consultation proposes amendments to the Banking Act and the Liquidity Ordinance that would take effect no earlier than the start of 2029 for the statutory changes. Existing prudential and liquidity reporting, including LCR and NSFR submissions, continues unchanged while the drafts are consulted on and debated in Parliament.

How do I know whether my bank is a category 3 institution for the liquidity-preparation duty?

FINMA assigns prudentially supervised banks and securities firms to five supervisory categories using measurable criteria in Annex 3 of the Banking Ordinance: total assets, assets under management, privileged deposits and required capital. FINMA describes category 3 institutions as large and complex, category 4 as medium-sized and category 5 as small; the Federal Council’s TBTF materials nevertheless use ‘medium-sized banks’ as shorthand for category 3 in this reform. The collateral-preparation requirement in the draft reaches Swiss banks and Swiss subsidiaries of foreign banks in categories 1 to 3; Swiss branches and representative offices of foreign banks and account-holding securities firms are exempt, as are categories 4 and 5. Your current FINMA category assignment is the starting point, but also confirm your entity type before scoping any work.

Would the senior managers regime apply to a Swiss branch of a foreign bank?

The consultation frames the accountability regime around more complex banks, described as those with 250 or more full-time-equivalent employees. The exact perimeter, including how it treats branches and group structures, is a question the final legislative text and its implementing provisions will settle. Until then, treat branch and subsidiary application as open and raise it in your consultation response if it affects you.

Is the proposed sanction charged per breach or on the whole institution?

The draft sets a maximum pecuniary administrative sanction of 10% of the supervised legal entity’s or partnership’s annual operating income, averaged over a multi-year reference period as specified in the draft, for a serious breach. The ceiling is therefore not based on a single year’s operating income. How the maximum is applied to a given case, including any per-breach mechanics, is the kind of detail that belongs in the statutory text and any implementing rules, not in the high-level consultation framing.

How does this consultation relate to UBS’s capital requirements?

They are different strands of the same reform. The full CET1 backing requirement for participations in foreign subsidiaries is contained in the separate Banking Act amendment whose dispatch the Federal Council adopted on 22 April 2026; it is not a Capital Adequacy Ordinance requirement. The Capital Adequacy Ordinance amendments adopted on the same date address other capital items, including the regulatory treatment of software. The 12 August consultation covers the separate Banking Act and Liquidity Ordinance package on governance, supervisory tools, crisis preparation and liquidity.

If we are neither systemically important nor category 3, is there anything in the package for us?

Not necessarily. The draft Liquidity Ordinance applies its preparation requirements to Swiss banks and Swiss subsidiaries of foreign banks in categories 1 to 3, subject to the stated exemptions, so SIB status and category 3 status are not the complete perimeter test. Separately, the Banking Act draft would apply general remuneration-system principles and the statutory duty of care across all banks, while several FINMA supervisory and enforcement measures have broader scope across supervised institutions.

When would the liquidity-preparation requirements actually start to apply?

The Federal Council plans to adopt the dispatch on the Banking Act for Parliament in 2027, and says the statutory amendments could enter into force at the start of 2029 at the earliest. The draft Liquidity Ordinance already proposes that the new preparation requirements be met from 1 January 2033. Its transitional provisions would start the Vorbereitungsnachweis filing duty within the transitional periods specified in the draft Liquidity Ordinance (earlier than the 1 January 2033 full-compliance date). These remain proposed dates until the instruments are adopted.

Key Takeaways

  • If your institution intends to comment, submit its response to the Federal Council consultation on the Banking Act and Liquidity Ordinance by 19 November 2026.
  • Scope differs by measure: general remuneration-system principles and the proposed statutory duty of care for persons responsible for proper business conduct apply across all banks; additional remuneration deferral and clawback rules and enhanced recovery and resolution planning requirements focus on systemically important banks; the senior managers regime is proposed for banks at or above the 250-FTE threshold, subject to case-by-case extension by FINMA; several proposed supervisory and sanctioning tools have broader scope; and the liquidity-preparation requirements apply to in-scope category 1 to 3 Swiss banks and Swiss subsidiaries, subject to the draft’s entity-specific exemptions.
  • A senior managers regime would require banks with 250 or more full-time-equivalent employees to map who owns which decision, with partial deferral and recovery of variable remuneration for systemically important banks.
  • FINMA would gain a proposed pecuniary administrative sanction of up to 10% of a supervised legal entity’s or partnership’s annual operating income (averaged over a multi-year reference period as specified in the draft) for a serious breach, plus broader public-information obligations concerning concluded enforcement proceedings.
  • Category 3 banks size their collateral-preparation volume using the Ordinance’s risk indicators; confirm your FINMA supervisory category and entity type before scoping the work.
  • The Vorbereitungsnachweis is a new dedicated submission to the SNB, separate from LCR and NSFR reporting; the preparation duty is not reporting-neutral.
  • The full CET1 backing of participations in foreign subsidiaries is on a separate Banking Act track whose dispatch was adopted on 22 April 2026; it is not part of the 12 August consultation and is not a Capital Adequacy Ordinance requirement.
  • Planned path: Federal Council dispatch on the Banking Act in 2027; the statutory amendments could enter into force at the start of 2029 at the earliest; the draft Liquidity Ordinance proposes full compliance with its new preparation requirements from 1 January 2033.

Sources and References

The road from consultation to 2029

The Swiss too-big-to-fail reform has now reached the stage where the abstract lessons of the Credit Suisse crisis turn into statutory text a bank can read and cost. The governance, enforcement, resolution and liquidity measures in this consultation are the operational half of that reform, distinct from the capital strand that drew the headlines, and they carry a preparation burden that stretches from the accountability map on a general counsel’s desk to the collateral a treasury team can move to the SNB before dawn. For institutions that intend to participate, the consultation closes on 19 November 2026. The Federal Council plans to adopt the Banking Act dispatch in 2027; in the meantime, firms can scope the responsibilities, remuneration and collateral work that the proposals would require if adopted.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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