Switzerland's financial market regulator conducted 45 on-site reviews of UBS in 2024 as the bank continued integrating its former rival Credit Suisse, according to FINMA's annual report released on Tuesday.

The Swiss Financial Market Supervisory Authority maintained "detailed dialogue" with Switzerland's remaining big bank during the integration process, confirming that "all applicable regulatory requirements were satisfied at all times."

The regulator said it would make greater use of its discretionary powers in future, particularly focusing on risk reduction from Credit Suisse business transactions that would not be integrated into UBS.

FINMA chair Marlene Amstad clarified the regulator's approach: "FINMA is not concerned with more rules in general, but with greater consequences in the event of a breach of the existing rules. Anyone who abides by the rules does not have to fear FINMA's power to levy fines."

During 2024, the watchdog carried out 733 investigations and concluded 38 proceedings against companies and individuals. The regulator has expressed support for enhanced powers, including early intervention capabilities, more active communication about supervision, and the authority to impose fines.

In a notable development regarding future capital requirements, FINMA chief executive officer Stefan Walter welcomed UBS's proposal to limit the size of its investment bank.

"UBS has said that it would limit the size of the investment bank as a proportion of risk-weighted assets," Walter said at the press conference in Bern. "We welcome that of course."

This comment signals a potential pathway in ongoing negotiations between UBS and Swiss authorities regarding additional capital requirements. Switzerland has been considering reforms that could impose up to $25 billion in fresh demands on the bank.

Walter also emphasised that financial risks extend beyond investment banking: "It's also important to understand that risks can come not just from investment banking but also mainly from non-financial risks," including money laundering, sanctions violations, and cybersecurity threats.

The watchdog also requested a review of the client base acquired from Credit Suisse, specifically examining non-financial risks related to high-risk client groups or regions, and supervised the migration of clients, particularly in asset management.

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