On 12 August 2026, the Swiss Federal Council launched a revision of the Swiss Banking Act and Liquidity Ordinance. The consultation period runs until 19 November 2026. The proposed reforms would reinforce the Swiss banking supervisory regime by increasing the requirements on bank governance and on crisis preparations for systemically important banks (SIBs), extending the regulatory powers of the Swiss Financial Market Supervisory Authority (FINMA) and expanding banks access to liquidity from the Swiss National Bank (SNB). These amendments are designed to fortify the stability of the Swiss financial centre.
Senior managers' regime
The senior managers' regime (SMR), modelled on the UK policy, will be applied to more complex banks at a corporate governance level. The new regime will not only target SIBs, but would be expanded to include complex organisations with a headcount threshold of 250 or more full-time equivalent (FTE) workers. This figure is based on the State Secretariat for Economic Affairs’ (SECO) definition of small and medium-sized enterprises. In certain circumstances, FINMA may apply the SMR to other banks (see "Expansion of FINMA's supervisory powers" below).
A list detailing each manager's responsibilities will be required by in-scope banks. This measure would create a distinct segregation of duties within senior management while strengthening executive accountability. On a broader scale, the objective is to promote responsible governance while fostering a corporate risk-taking culture. Other existing governance requirements will now be regulated through statutes enacted by the Swiss Parliament, rather than executive ordinances.
Remuneration principles
The current general principles embedded in the FINMA Circular on remuneration should be extended to all banks, not just select ones. These principles aim to foster the sustainable and long-term development of institutions while mitigating adverse risk-taking behaviour. Specific requirements, however, such as deferring variable remuneration and implementing clawback clauses, should apply only to SIBs. More specifically, such requirements apply to individuals within these banks who are subject to the regulatory fit-and-proper requirement, including persons who are responsible for the administration and management of the bank or for risk management or regulatory compliance. They also apply to individuals within the banks who receive high remuneration. FINMA will be vested with regulatory authority to intervene in this area.
Expansion of FINMA's supervisory powers
Under the proposed adjustments, FINMA will be empowered to take early and more effective intervention measures when risks emerge, thereby ensuring that banks are organised in a way that prevents financial impairment of the economic situation and protects client interests. Before acting, FINMA no longer need await risk of insolvency or violation of its regulations.
New supervisory instruments have been proposed, including the possibility to apply SMR to banks that do not qualify as SIBs and have less than 250 FTE workers on a case-by-case basis, particularly where there are shortcomings in corporate governance.
The supervisory instruments also require banks to take measures to remedy certain shortcomings, such as additional liquidity or capital to ensure the institution remains a going concern.
Recovery and resolution plan adjustments
Furthermore, SIBs would fall under the scope of increased and detailed requirements on recovery and resolution plans. Additionally, the legal framework for resolution will be subject to more rigorous criteria and resolution strategies that are far more practical to execute. In particular, the Federal Council is proposing a legal basis to empower FINMA to require banks to adopt measures to remedy certain shortcomings, such as additional liquidity or going-concern capital.
Facilitated access to SNB liquidity support
Finally, the consultation draft proposes to grant banks simplified access to the SNB's liquidity support. The bill outlines measures to facilitate the transfer of collateral to the SNB, particularly by mandating that such transfers be pre-arranged. This facilitates compliance with the revised Liquidity Ordinances (LiqO) regarding the pre-verification of collateral for the SNB and foreign central banks. Only banks from Categories 1 through 3 (i.e. SIBs and larger regional banks) will be subject to these measures. Category 3 banks will be authorised to determine the volume of assets to be prepared on the basis of the risk indicators set out in the LiqO. Small banks of Categories 4 and 5 fall outside the scope of these requirements.
Outlook
Contrary to what its name might suggest, the new legislative package applies to more than just "too big to fail" banks. If the package is adopted, FINMA's new supervisory powers, particularly the SMR, will have a significant impact on the market and raise many questions and risks.
The Swiss Bankers Association has criticised the Swiss Federal Council's proposal as too extensive. Following the consultation period, the Federal Council intends to submit the dispatch to Parliament in 2027. The legislative amendments could come into force at the earliest in early 2029, whilst the new liquidity requirements may not take effect until 2033. Consequently, the regulation of major banks remains a multi-year project fraught with uncertainties.
For more information on these proposed regulations and Switzerland’s banking sector, contact your CMS client partner or the CMS expert who wrote this article.
