IMF urges major financial reforms in Switzerland

The International Monetary Fund (IMF) stated on Thursday that Switzerland needs robust financial sector reforms following the state-orchestrated rescue takeover of Credit Suisse by UBS.

The IMF noted that while the state-assisted acquisition of Credit Suisse by UBS has brought stability to the financial markets, the experience and future outlook necessitate significant reforms in the financial sector.

“The state-facilitated acquisition of Credit Suisse by UBS has stabilised the financial markets and is progressing as planned, but it also poses challenges.The combined bank, with assets of 180 percent of GDP, is the largest G-SIB relative to its host economy.” the IMF said in a staff concluding statement of the 2024 Article IV Mission.  “The complexity of the combined bank’s global operations also makes supervision more challenging. In the event of a future crisis, the previous merger options may no longer be feasible. This highlights the importance of ensuring implementability of the bank’s recovery plan and conducting a resolvability assessment. Competition and concentration risks should be closely monitored.”