Switzerland's financial supervisor cannot fine anyone. Not a bank, not a banker. As this is written, a consultationThe stage where a draft law or rule is published for comment before it is adopted — the one moment arguments can still shape the text. National systems name it differently; Swiss practice says Vernehmlassung for statutes, Anhörung for regulators' rules. is open that would change that — and the Credit Suisse case that forced it is still unresolved before the Federal Supreme CourtSwitzerland's highest court, in Lausanne. Last stop for an appeal against a FINMA decision..
Below: what FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. can actually do, what it cannot, how the gap was built, and what is now proposed to close it.
In summary
- FINMA cannot fine. It can strip a licence, ban an individual, publish a ruling and take back a profit. It cannot impose a penalty.
- That was a design choice, made twice on expert advice, not an oversight.
- Credit Suisse turned it into a live question. In March 2023 FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. ordered CHF 16 billion of bonds written off overnight. A court later held it had no legal basis to do so.
- Nothing has changed yet. A consultationThe stage where a draft law or rule is published for comment before it is adopted — the one moment arguments can still shape the text. National systems name it differently; Swiss practice says Vernehmlassung for statutes, Anhörung for regulators' rules. that would give FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. a fining power closes on 19 November 2026. The earliest realistic start is 2029.
A note on the acronym before it starts appearing. FINMASA is the Financial Market Supervision Act of 22 June 2007 (SR 956.1) — the statute that created FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. and lists, article by article, what it may do. When this dossier says a power does not exist, it means it is not in that list.
The consultation that is open now
On 12 August 2026 the Federal CouncilThe seven-member Swiss executive. It makes ordinances and decides when laws come into force. opened a consultationThe stage where a draft law or rule is published for comment before it is adopted — the one moment arguments can still shape the text. National systems name it differently; Swiss practice says Vernehmlassung for statutes, Anhörung for regulators' rules. on amending the Banking Act and the Liquidity OrdinanceA rule made by the government or a regulator under a power given by an Act. Binding law, but below the Act.. It closes on 19 November 2026.
Three of its proposals go to the heart of what FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. lacks:
| Proposal | What it would do |
|---|---|
| Pecuniary administrative sanctions | FINMA could impose fines on culpable institutions — the instrument it has never held |
| Senior manager accountability | Banks with 250 or more employees must document in writing who is responsible for which decisions |
| Duty to inform | FINMA would be obliged to inform the public about concluded proceedings |
The package also carries enforcement charges for institutions that delay implementing ordered measures.
Nothing here is law. The dispatch to Parliament is expected in 2027; the earliest realistic entry into force is 2029. A reader who takes from the headlines that FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. is about to acquire fining powers has read them too quickly. What exists today is a consultationThe stage where a draft law or rule is published for comment before it is adopted — the one moment arguments can still shape the text. National systems name it differently; Swiss practice says Vernehmlassung for statutes, Anhörung for regulators' rules. draft.
What FINMA can do
FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone.'s enforcement instruments sit in Arts 31–37 FINMASA. They are not trivial.
| Article | Instrument |
|---|---|
| Art. 31 | Restoration of compliance (Wiederherstellung des ordnungsgemässen Zustandes) — the workhorse provision |
| Art. 32 | Declaratory ruling and substituted performance |
| Art. 33 | Industry ban on individuals, maximum five years (Art. 33(2)) |
| Art. 34 | Publication of the supervisory ruling |
| Art. 35 | Confiscation of profit made through serious breach |
| Art. 36 | Appointment of an investigating agent |
| Art. 37 | Withdrawal of licence, recognition, authorisation or registration |
Licence withdrawal ends a firm. An industry banAn order stopping a named individual from holding a senior role at a supervised firm — up to five years under FINMASA Art. 33. removes an individual. Publication damages reputations that took decades to build. These are real powers.
What FINMA cannot do
It cannot fine. Art. 35 permits confiscation of profit — a disgorgementTaking back a profit somebody made from breaking the rules. It strips the gain; it is not a fine, so no profit means no payment., stripping a gain — not a penalty calibrated to deterrence. The distinction is not academic: disgorgement caps recovery at what was earned, so a breach that produced no measurable profit produces no financial consequence at all.
The Financial Stability Board put it plainly in its Peer Review of Switzerland of 29 February 2024: FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone.'s "supervisory and punitive instruments are more limited than its peers. For example, FINMA cannot impose fines (apart from the disgorgements described above)." The FSB also found that, unlike peers, FINMA "generally cannot report publicly on individual enforcement proceedings", and recommended both a senior managers regime and a power to publish.
FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. also lacks coercive investigative powers. It cannot search premises or seize evidence; those require the criminal authorities.
How the gap was built
This was designed, not overlooked.
FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. began operating on 1 January 2009, merging the Federal Banking Commission, the Federal Office of Private Insurance and the Anti-Money Laundering Control Authority. Its statute, the Financial Market Supervision Act of 22 June 2007 (FINMASAThe Financial Market Supervision Act of 2007 (SR 956.1) — the statute that created FINMA and lists what it may do. In German, FINMAG., SR 956.1), came into force in stages — the organisational provisions from 1 February 2008, the remainder from 1 January 2009. Its constitutional footing is Art. 98 of the Federal Constitution, headed "Banks and insurance companies", under which the Confederation legislates on the banking and stock exchange system while taking account of the special role of the cantonal banks.
Art. 4 FINMASA sets the objectives: protection of creditors, investors and insured persons, and protection of the proper functioning of the financial markets. A second sentence adds that supervision thereby contributes to the standing, competitiveness and future viability of the Swiss financial centre. That is framed as a consequence of good supervision, not a free-standing mandate — a distinction worth holding when the competitiveness argument is deployed against reform.
The separation of supervision from punishment is deliberate. Art. 50 FINMASA makes the Federal Department of Finance the prosecuting and adjudicating authority for financial-market criminal offences under administrative criminal law, with referral to the Office of the Attorney General where a custodial sentence is in prospect. Art. 38(3) obliges FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. to notify prosecutors of offences it discovers. Criminal insider dealing and market manipulation reach the Attorney General by a different route, under Art. 156 FinfraG.
The theory was clean: FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. prevents, prosecutors punish. Expert reports in 2004 and 2014 both concluded FINMA should not have fining powers, reasoning that a punitive function would engage the privilege against self-incrimination and hobble administrative proceedings.
On accountability, one common description is simply wrong. FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. is often said to report to Parliament rather than the Federal CouncilThe seven-member Swiss executive. It makes ordinances and decides when laws come into force.. It does not. The Federal Council elects the Board of Directors (Art. 9(3)), FINMA discusses strategy with the Federal Council annually and deals with it through the Federal Department of Finance (Art. 21(2)–(3)), and the federal chambers exercise only Oberaufsicht — high-level superintendence — under Art. 21(4). FINMA is independent in the exercise of supervision (Art. 21(1)). It is not answerable to Parliament in any line sense.
What happened to Credit Suisse: the timeline
Nine dates. The whole crisis, and everything since, fits in them.
| Date | What happened |
|---|---|
| 9 Feb 2023 | Credit Suisse reports a CHF 7.3bn annual loss. Its CET1 ratio — the strongest layer of its capital — is 14.1%, comfortably above requirement. Its liquidity coverage ratio is 144% |
| 15 Mar 2023 | The chairman of Saudi National Bank, its largest shareholder, says his bank would "absolutely not" put in more money. Confidence goes |
| 16 Mar 2023 | Credit Suisse says it will draw up to CHF 50bn from the Swiss National Bank under an existing facility. The Federal Council issues an emergency ordinance creating further liquidity support |
| 19 Mar 2023, 20:00 | The emergency ordinance is amended. A new Article 5a lets FINMA order the write-down of Additional Tier 1 capital |
| 19 Mar 2023, 22:01 | FINMA's decree. CHF 16bn of AT1 bonds written to zero. Shareholders keep about CHF 3bn in UBS shares |
| 20 Mar 2023 | The ECB, the Single Resolution Board and the EBA issue a joint statement: in the EU, shares absorb losses first |
| 17 Dec 2024 | The Parliamentary Investigation Committee reports, in 569 pages, on how the federal authorities handled it |
| 1 Oct 2025 | The Federal Administrative Court quashes FINMA's decree in a partial decision, B-2334/2023 |
| 10 Dec 2025 | The Federal Supreme Court grants suspensive effect to UBS's appeal. The bonds stay worthless while it decides |
Two capital terms in that table carry the analysis. CET1 is a bank's hardest capital — ordinary shares and retained profit — measured against its risk-weighted assets. AT1 bonds sit one layer down: investors lend at a higher rate, knowing the bonds can be written off if the bank gets into serious trouble. The ordinary sequence is that shares are wiped out first and AT1Additional Tier 1 — bonds a bank can write off or convert to shares if it gets into trouble. Investors get a higher return for taking that risk. afterwards. In March 2023 it ran the other way.
The night the hierarchy inverted
On 19 March 2023, as Credit Suisse was folded into UBS, FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. ordered the complete write-downCancelling what is owed on a bond, in part or entirely. The holder is not paid back. of the bank's Additional Tier 1 capital — around CHF 16 billion nominal, which the Federal Administrative CourtThe Swiss court that hears appeals against FINMA decisions. Its judgments are where FINMA's legal positions get tested in public. later put at CHF 16.5 billion. Shareholders received approximately CHF 3 billion in UBS shares.
Bondholders were wiped out. Equity was not.
The sequence is documented in the instruments themselves. The Federal CouncilThe seven-member Swiss executive. It makes ordinances and decides when laws come into force.'s emergency ordinanceA rule made by the government or a regulator under a power given by an Act. Binding law, but below the Act. of 16 March 2023 (SR 952.3) was amended on 19 March by AS 2023 136, which records its own entry into force as 19 March 2023, 20:00. The new Art. 5a empowered FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. to order the write-downCancelling what is owed on a bond, in part or entirely. The holder is not paid back. of additional core capital. FINMA's decreeAn individual, binding order made by a Swiss authority to a named party (German: Verfügung). It can be appealed to a court, which can quash it. followed at 22:01 — a timing recorded in the court's own judgment, not merely in press accounts.
Two things are worth separating, because they are routinely conflated. On 16 March Credit Suisse announced it would draw up to CHF 50 billion from the Swiss National Bank under an existing Covered Loan Facility. The emergency ordinanceA rule made by the government or a regulator under a power given by an Act. Binding law, but below the Act. did something different: it created additional liquidity assistance loans and a public liquidity backstop secured by a federal default guarantee, instruments of a different order of magnitude.
The bank was not short of capital on paper. Its CET1Common Equity Tier 1 — the strongest layer of a bank's capital, essentially ordinary shares and retained profit. The CET1 ratio compares it to the bank's risk-weighted assets. ratio — hardest capital against risk-weighted assets, the number a supervisor looks at first — was 14.1% at the end of the fourth quarter of 2022, with a three-month average liquidity coverage ratioHow much easily-sellable assets a bank holds against the cash it could be asked for over 30 stressed days. Above 100% means it holds more than the test requires. of 144% — a figure the earnings release itself notes had improved from lower levels earlier in the quarter. What failed was confidence, after the chairman of Saudi National Bank said on 15 March that his institution would "absolutely not" provide further funds.
What the court decided — and what it did not
On 1 October 2025 the Federal Administrative CourtThe Swiss court that hears appeals against FINMA decisions. Its judgments are where FINMA's legal positions get tested in public. handed down a partial decisionA judgment settling some issues in a case and leaving others open (German: Teilentscheid). The case is not over. in B-2334/2023, brought by roughly 3,000 complainants across some 360 cases. It confirmed the complainants' right to appeal and revoked FINMA's decree.
What that means, plainly. A Swiss decreeAn individual, binding order made by a Swiss authority to a named party (German: Verfügung). It can be appealed to a court, which can quash it. — a Verfügung — is a binding order made by an authority to named parties. Revoking one removes its legal effect: in law the order is treated as never having been validly made. It does not put the money back. The bonds were cancelled in the market in 2023, and a judgment about the order's validity does not by itself recreate them. That takes a further decision the court has not yet made.
Its findings were unsparing:
- The contractual viability eventThe trigger written into an AT1 bond's terms that lets it be written down — usually capital falling too far, or the bank needing state support to survive. had not been triggered: "at the time of the write-off, CS was sufficiently capitalised and met regulatory capital requirements."
- The federal and SNB measures "served solely to ensure liquidity" and had no direct effect on the equity base.
- Art. 26 of the Banking Act addressed "a different subject matter" and was "in any event too vague" to support a write-off of third-party rights under the principle of legality — the same applying to Art. 31 FINMASA and Art. 5a of the emergency ordinanceA rule made by the government or a regulator under a power given by an Act. Binding law, but below the Act..
- Art. 5a was unconstitutional in several respects, engaging the limits on Federal CouncilThe seven-member Swiss executive. It makes ordinances and decides when laws come into force. emergency ordinancesA rule made by the government or a regulator under a power given by an Act. Binding law, but below the Act. (Arts 184(3) and 185(3) FC), the delegation of expropriation rights (Art. 178(3) FC) and the guarantee of ownership (Art. 26 FC).
- "The bondholders' property rights were seriously interfered with, which would have required a clear and formal legal basis. But no such basis existed."
Three qualifications matter, and they are usually dropped. The decision is a Teilentscheid — a partial decisionA judgment settling some issues in a case and leaving others open (German: Teilentscheid). The case is not over.. The court has not yet ruled on whether the write-off should be reversed. Its treatment of Art. 5a was a preliminary, incidental constitutional review: Swiss courts cannot strike down federal enactments, so the provision was disapplied in this case, not voided. And a revoked decreeAn individual, binding order made by a Swiss authority to a named party (German: Verfügung). It can be appealed to a court, which can quash it. is not a restored bond.
Where the litigation actually stands
As at August 2026, the bondholders have recovered nothing.
Both FINMA and UBS appealed to the Federal Supreme CourtSwitzerland's highest court, in Lausanne. Last stop for an appeal against a FINMA decision. — this is not, as often reported, a FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone.-only appeal. On 22 October 2025 the Federal Administrative CourtThe Swiss court that hears appeals against FINMA decisions. Its judgments are where FINMA's legal positions get tested in public. suspended every pending AT1Additional Tier 1 — bonds a bank can write off or convert to shares if it gets into trouble. Investors get a higher return for taking that risk. case except B-2334/2023. On 10 December 2025 the Federal Supreme Court granted suspensive effect to UBS's appeal on legal-certainty grounds. The practical consequence is blunt: the AT1 instruments remain written off and worthless. In March 2026 the Federal Supreme Court refused FINMA's request to join the Federal Department of Finance to the proceedings, holding that the Confederation's liability was not the subject matter.
No judgment has been handed down. No date has been announced.
The parallel US action, and why it failed
The US case is over, and the reason it failed is worth understanding, because it was never about whether the write-downCancelling what is owed on a bond, in part or entirely. The holder is not paid back. was right.
Bondholders sued the Swiss Confederation itself — not FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone., not UBS — in the Southern District of New York. They were mostly funds: AllianceBernstein entities, Japanese trustee banks, and a long list of others, represented by Quinn Emanuel. Between them they held USD 372 million of the USD 17.3 billion of AT1sAdditional Tier 1 — bonds a bank can write off or convert to shares if it gets into trouble. Investors get a higher return for taking that risk. written off. Their claims were conversionThe tort of treating someone else's goods as your own. Yuen v Li (2026) held it does not extend to crypto., tortious interference, deceptive trade practices and unjust enrichmentA claim to make someone give back a benefit they should not have kept.. Wachtell Lipton acted for Switzerland.
The obstacle was jurisdictional. Under the US Foreign Sovereign Immunities Act, a foreign state cannot normally be sued in a US court at all. The bondholders relied on the statute's commercial activity exception (28 U.S.C. § 1605(a)(2)): a state loses immunity for an act abroad taken "in connection with a commercial activity" that "causes a direct effect in the United States". The commercial activity they pointed to was Switzerland's brokering of the UBS merger.
The district court (Ho, J.) held that brokering the merger was not commercial in nature and dismissed for lack of subject-matter jurisdiction. On 16 July 2026 the US Court of Appeals for the Second Circuit affirmed, in Creditincome Limited v. The Swiss Confederation, No. 25-2733 (Calabresi, Chin and Merriam, JJ.).
So the merits were never reached. No US court has said whether the write-downCancelling what is owed on a bond, in part or entirely. The holder is not paid back. was lawful. It said only that a state rescuing its own systemically important bank, by emergency legislation and regulatory order, is acting as a government rather than as a market participant — and cannot be sued in New York for it. For a plain-English account, see the Library of Congress note, "Appellate Court Rules Switzerland Immune from Liability for Harms from Credit Suisse Bank Merger" (12 August 2026).
The practical consequence is that every route left to the bondholders runs through Switzerland.
Europe's supervisors distanced themselves within a day. The ECB, the Single Resolution Board and the EBAThe European Banking Authority — ESMA's banking-side sibling, responsible for MiCA's stablecoin rulebook. It drafts; the Commission adopts. issued a joint statement on 20 March 2023: "Common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier 1 be required to be written down."
The warnings, and their dates
Precision about vintage matters here, because the staffing critique is frequently made with numbers that are now fourteen years old.
The IMF's Country Report No. 14/264 of September 2014 assessed Switzerland against the Basel Core PrinciplesThe global checklist for whether banking supervision is any good, issued by the Basel Committee. The IMF grades countries against it. and rated Core Principle 2 — independence, accountability, resourcing and legal protection — Materially Non-Compliant. It was the only principle to receive that grade.
What Core Principle 2 actually asks. The Basel Committee's headline requirement, in the 2012 edition Switzerland was assessed against, is that the supervisor "possesses operational independence, transparent processes, sound governance, budgetary processes that do not undermine autonomy and adequate resources, and is accountable for the discharge of its duties and use of its resources", and that the legal framework "includes legal protection for the supervisor". Nine essential criteria unpack that. The four that carry most weight here:
| Limb | What the standard requires |
|---|---|
| Independence | Independence, accountability and governance "prescribed in legislation and publicly disclosed"; "no government or industry interference"; the supervisor has "full discretion to take any supervisory actions or decisions" |
| Accountability | Published objectives, and accountability "through a transparent framework"; a transparent process for appointing and removing the head of the authority, who may be removed only for reasons specified in law |
| Resourcing | A budget providing "staff in sufficient numbers and with skills commensurate with the risk profile and systemic importance of the banks supervised", salary scales that attract and retain, budgets for external experts, training, technology and travel for on-site work — and an annual stock-take of skills against projected need |
| Legal protection | Laws protecting the supervisor and its staff "against lawsuits for actions taken and/or omissions made while discharging their duties in good faith", and against the costs of defending them |
Both editions are worth having open if you are testing a supervisor against them: the 2012 text is the one used in the 2014 Swiss assessment, and the April 2024 revision is the current standard. Principle 2's wording is materially unchanged between them. The report recorded bank-related staff rising "from around 87 FTE in 2010 to 98 FTE in 2012", and total resource allocated to the two largest banks of "around 30" FTE. Those are 2012 figures.
The position has changed, and the direction of travel is steeper than the 2014 report would suggest. FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone.'s own audited financial statements give the series:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Average full-time positions | 519 | 539 | 583 | 634 | 698 |
| Staff employed (people) | — | — | 638 | 695 | 764 |
| Board's cap on permanent posts | — | — | 561.6 | 613.6 | 734.7 |
That is a 34% rise in full-time positions in four years, and the cap on permanent posts rose by 121.1 in a single step at the start of 2025. FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. gives the reason itself: the increase was made "in order to effectively drive forward key transformation projects within the organisation, particularly by allowing more intensive and effective supervision to be achieved in the areas of banking, insurance and asset management". The 2024 increase was justified partly by "Erkenntnisse und Massnahmen aus der CS-Krise" — lessons and measures from the Credit Suisse crisis.
That is a direct answer to the criticism that FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. leaned too heavily on external audit firms as its "extended arm". Two cautions before the numbers are used. These are FINMA-wide and cannot be set against the 98 banking-supervision FTE in the IMF report. And a headcount cap is a permission to hire, not a hire: FINMA records that "the majority" of the 2025 roles had been filled by year end. A newer IMF assessment also exists — Country Report No. 2025/266, the Financial System Stability Assessment.
The Parliamentary Investigation Committee reported on 17 December 2024 in a 569-page study of the federal authorities' conduct during the crisis. On FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone.'s 2017 grant of a capital "regulatory filter" to Credit Suisse, the committee identified "an extensive interpretation of the legal bases" and judged the decision unzweckmässig — inexpedient. On enforcement, it recorded eight proceedings against Credit Suisse management in the period, three closed when the individuals signed declarations of renunciation and five still open, and regretted that FINMA had not succeeded in enforcing supervisory-compliant business practice despite them.
For the practitioner
The comparison with the FCA needs care. It is often said that the FCA fined NatWest £264.8 million for anti-money-laundering failures where FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. could not. That was not an administrative fine. It was the FCA's first criminal prosecution under the Money Laundering Regulations 2007; NatWest pleaded guilty and was sentenced at Southwark Crown Court on 13 December 2021, the penalty reduced by a third for the plea. FINMA can also refer matters for criminal prosecution, under Art. 38(3) FINMASAThe Financial Market Supervision Act of 2007 (SR 956.1) — the statute that created FINMA and lists what it may do. In German, FINMAG.. The genuine distinction lies in the FCA's separate administrative fining power under FSMA — and that is the comparison to draw.
Read the timetable, not the announcement. The reform has advanced twice in 2026: the dispatch on the Banking Act revision was adopted on 22 April, and the consultationThe stage where a draft law or rule is published for comment before it is adopted — the one moment arguments can still shape the text. National systems name it differently; Swiss practice says Vernehmlassung for statutes, Anhörung for regulators' rules. carrying the fining power opened on 12 August. Neither is law. Any assessment of Swiss supervisory risk written before 2029 should assume the current toolkit.
The precedent risk sits in the emergency ordinance, not the write-down. The court's most consequential holding is not that Credit Suisse was adequately capitalised. It is that Art. 5a failed constitutional requirements for Federal CouncilThe seven-member Swiss executive. It makes ordinances and decides when laws come into force. emergency ordinancesA rule made by the government or a regulator under a power given by an Act. Binding law, but below the Act. and for delegated expropriation. That reasoning reaches every future crisis in which the Federal Council legislates overnight.
Dotted-underlined terms carry hover definitions — including CET1, AT1, disgorgement and suspensive effect — and the full list is in the glossary. For the other half of Swiss supervision, where the supervisor is a private body rather than FINMA, see Supervised by whom.
Key takeaways
- FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. has no power to fine. Its pecuniary instrument, under Art. 35 FINMASAThe Financial Market Supervision Act of 2007 (SR 956.1) — the statute that created FINMA and lists what it may do. In German, FINMAG., is confiscation of profit — a disgorgementTaking back a profit somebody made from breaking the rules. It strips the gain; it is not a fine, so no profit means no payment., not a penalty.
- A consultationThe stage where a draft law or rule is published for comment before it is adopted — the one moment arguments can still shape the text. National systems name it differently; Swiss practice says Vernehmlassung for statutes, Anhörung for regulators' rules. that would grant a fining power and a senior manager regime is open until 19 November 2026. Entry into force is unlikely before 2029.
- The Federal Administrative CourtThe Swiss court that hears appeals against FINMA decisions. Its judgments are where FINMA's legal positions get tested in public. revoked FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone.'s AT1Additional Tier 1 — bonds a bank can write off or convert to shares if it gets into trouble. Investors get a higher return for taking that risk. decreeAn individual, binding order made by a Swiss authority to a named party (German: Verfügung). It can be appealed to a court, which can quash it. in a partial decision, B-2334/2023, on 1 October 2025. It has not ruled on reversal.
- The Federal Supreme CourtSwitzerland's highest court, in Lausanne. Last stop for an appeal against a FINMA decision. granted suspensive effectAn order pausing a decision while an appeal against it is heard. Nothing changes on the ground until the appeal is decided. in December 2025. The bonds remain worthless and no judgment has issued.
- The staffing critique rests on 2012 data. FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. averaged 698 full-time positions in 2025 (2024: 634), and its board raised the cap on permanent posts to 734.7 — a 34% rise in positions over four years.
Sources
Legislation and ordinances
- FINMASA, SR 956.1 — Financial Market Supervision Act of 22 June 2007
- Federal Constitution, SR 101, Art. 98
- Ordinance of 16 March 2023, SR 952.3 · amendment of 19 March 2023, AS 2023 136
- FinfraG, SR 958.1, Arts 154–156
Court
- Bundesverwaltungsgericht, Teilentscheid B-2334/2023, 1 October 2025
- FAC media release, "Unlawful write-off of AT1 capital instruments", 14 October 2025
- FAC media release, "Suspension of AT1 cases", 22 October 2025
Supervisors and assessors
- FINMA media release, 19 March 2023
- FINMA Annual Report 2025 · FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone. Jahresrechnung (audited financial statements) 2023, 2024 and 2025 — the staffing series and the board's headcount caps
- BCBS, Core Principles for Effective Banking Supervision, September 2012 — Principle 2 and its nine essential criteria, the edition used in the 2014 assessment · April 2024 revision
- FSB, Peer Review of Switzerland, 29 February 2024
- IMF Country Report No. 14/264, September 2014
- ECB Banking Supervision, SRB and EBA joint statement, 20 March 2023
United States
- Creditincome Limited v. The Swiss Confederation, No. 25-2733 (2d Cir., 16 July 2026)
- Library of Congress, Global Legal Monitor, 12 August 2026
Parliament and reform
- PUK report of 17 December 2024, Geschäft 24.098
- Federal Council parameters, 6 June 2025
- EFD, consultation on the Banking Act and Liquidity Ordinance, 12 August 2026
Scholarship
- Javier Paz Valbuena and Horst Eidenmüller, 'Bailout Blues: The Write-Down of the AT1 Bonds in the Credit Suisse Bailout' (2023) 24(3) European Business Organization Law Review 409
- Sjur Swensen Ellingsæter, 'Could it Happen in the EU? An Analysis of Loss Distribution between Shareholders and AT1 Bondholders under EU Law' (2024) 10(2) Journal of Financial Regulation 194 (see also Correction)
- Roy Gava and Urs Zulauf, 'Enforcement of Financial Regulation in Switzerland' (SSRN working paper, 27 June 2025)
Correction, 24 August 2026. An earlier version of this dossier gave FINMAThe Swiss Financial Market Supervisory Authority. It licenses firms, inspects them and can shut them down — but it cannot fine anyone.'s staffing as "617 average full-time positions in 2025, up from 554 in 2024". Those figures were wrong. FINMA's audited financial statements and its Annual Report 2025 both give 698 average full-time positions in 2025 and 634 in 2024. The staffing table above is taken from the financial statements. The same revision added the Credit Suisse timeline, the detail of the US proceedings, and the text of Basel Core Principle 2.
Research and analysis, not legal advice · positions stated as at 24 August 2026 · check the SR texts in force. The information provided is for research and educational purposes only and does not constitute legal advice.