The amendments to the CAO were drawn up by the Federal Department of Finance in collaboration with the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank (SNB). The changes aim to enhance the competitiveness of the Swiss banking system in the international context.
Purpose and scope of the amendments
With the proposed amendments to the CAO, the capital coverage of riskier transactions will be increased relative to those with a lower risk, in line with the final Basel III Standards. This stronger differentiation according to risk may affect banks differently. Overall, the capital requirements for the banking sector – with the exception of the larger banks – will not change significantly.
Furthermore, the interaction between standardised and internal measurement procedures will be adjusted, with the aim of making the calculation of capital requirements transparent and internationally comparable. In this respect the scope of action of banks using internal models is limited compared to that of other banks using standard procedures.
Finally, certain regulations that were previously regulated at the level of FINMA circulars will be transposed into the CAO and certain existing provisions of the CAO will be modified.
Timing of implementation
National implementation in Switzerland is based not only on the timeframe imposed by the BCBS, but also on the timeframe of other major jurisdictions such as the EU, UK, and the USA, to ensure equal competition.
The consultation process will last until 25 October 2022 and the changes in the law are expected to enter into force during the course of 2024.
Get in touch
Our Banking & Finance practice group regularly deals with issues involving banks and other financial institutes and will be pleased to answer all queries you may have.
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