FINMA revises large exposure rules for banks

April 7, 2017

The Swiss Financial Market Supervisory Authority (FINMA) is updating its circular “Risk diversification – banks” in line with the revised Basel III international banking standards, which include new large exposure rules (risk diversification). These rules impose a maximum limit on the size of individual loans.

The new rules are to be transposed into Swiss law in accordance with the Federal Council’s strategy of adopting key international standards in the financial sector. As such, the Federal Council is amending its Capital Adequacy Ordinance, and FINMA is updating its Circular 2008/23 “Risk diversification – banks”. The new version of the circular rectifies weaknesses in the current rules with improved requirements for measuring and controlling large loans.

The ordinance and circular are both scheduled to enter into force on 1 January 2019.

For further details, please see full press release here.