In the wake of one of the most seismic banking mergers in history—the 2023 acquisition of Credit Suisse (CS) by UBS—Switzerland’s financial watchdog has delivered its latest assessment on the combined entity’s readiness for potential crises. Released on September 25, 2025, the Swiss Financial Market Supervisory Authority (FINMA) report highlights notable advancements in UBS’s resolvability, affirming that a resolution remains feasible. However, it underscores persistent challenges, including the need for legislative reforms to enhance regulatory flexibility and better integration of emergency plans. This evaluation comes as UBS continues its complex integration of CS, a process that has already achieved key milestones like the merger of parent banks and Swiss units. With global markets watching closely, the report signals cautious optimism but emphasizes that Switzerland’s “too big to fail” (TBTF) framework requires evolution to handle a G-SIB like UBS effectively. As integration nears completion, this update not only reflects on past progress but also charts a path forward for ensuring financial stability without taxpayer bailouts.
The UBS-CS merger, orchestrated amid CS’s near-collapse in March 2023, created a banking behemoth with over $1.6 trillion in assets, dwarfing Switzerland’s GDP and amplifying systemic risks. FINMA’s annual resolution reports serve as critical health checks, evaluating whether the bank can be wound down or recapitalized orderly in a crisis. In this context, the 2025 report arrives amid broader regulatory scrutiny, including calls from the Federal Council for enhanced crisis tools. Media reactions have been mixed, praising integration strides while highlighting unresolved vulnerabilities that could test Switzerland’s financial safeguards.
Key Highlights from FINMA’s 2025 UBS Resolution Report
FINMA’s assessment, based on UBS’s status as of December 31, 2024, confirms that the bank could be recapitalized and resolved using its preferred strategy: a single point of entry (SPE) bail-in, where losses are absorbed by shareholders and creditors to keep the entity operational. This “going concern” approach avoids liquidation, preserving systemically important functions like payment systems and lending.
Significant progress stems from the ongoing CS integration:
- Milestone Achievements: The merger of UBS and CS parent banks, along with their Swiss entities, has streamlined operations and reduced complexity. This has improved group-wide resolvability compared to 2024, addressing prior shortcomings like fragmented structures that complicated crisis management.
- Resolvability Improvements: FINMA notes advancements in remedying identified issues, enhancing the feasibility of an orderly resolution. The integration has consolidated resources, making it easier to apply bail-in instruments and maintain critical functions.
However, gaps persist:
- Emergency Plan: UBS’s plan largely complies with the Banking Ordinance but falls short of executability. FINMA stresses it must be better embedded in the overall resolution strategy to support options like a solvent market exit. The CS crisis revealed limitations in such plans for G-SIBs, prompting calls for development to ensure international stability.
- Recovery Plan: For the second year, FINMA suspended its review due to rapid integration changes. An updated version submitted in summer 2025 is under examination, but ongoing flux hinders full assessment.
These findings align with lessons from the CS debacle, as detailed in Parliamentary Investigation Committee reports and Federal Council analyses, which criticized emergency planning for insufficient global safeguards.
In the Light of UBS-Credit Suisse Integration: A Double-Edged Sword
The UBS-CS merger, valued at $3.2 billion and backed by government guarantees, was a shotgun wedding to avert a systemic meltdown. Two years on, integration has progressed impressively: By mid-2025, UBS completed the legal merger of Swiss operations, migrated clients to unified platforms, and realized $13 billion in cost synergies—exceeding initial targets. This has bolstered resolvability by reducing silos, but challenges remain. FINMA’s report implicitly critiques the merger’s pace: Integration’s “rapid changes” have delayed full recovery plan evaluations, highlighting tensions between operational consolidation and regulatory preparedness.
Financially, the merger has strengthened UBS—shares up 40% since 2023, with a market cap exceeding $100 billion—but amplified TBTF risks. As Europe’s largest bank post-merger, UBS’s failure could ripple globally, underscoring FINMA’s push for “optionality.” The report supports Federal Council proposals for legislative tweaks, including flexible crisis tools like solvent exits or forced sales, to avoid emergency powers or public funds.
In broader context, this echoes international trends: Post-2008 reforms emphasized bail-ins, but recent bank failures (e.g., Silicon Valley Bank) have revived debates on liquidity support and resolution agility. For UBS, embedding the emergency plan into resolution strategies could enable a “market exit” without chaos, aligning with FSB guidelines for G-SIBs.
Implications for Global Banking and Switzerland’s Financial Landscape
The report reinforces Switzerland’s commitment to robust TBTF regimes, but it also spotlights integration hurdles. UBS’s size—holding 25% of Swiss deposits—amplifies stakes; a crisis could cost billions, per Federal Council estimates. By advocating for “crisis toolbox” enhancements, FINMA aligns with international peers like the FSB, emphasizing liquidity support as a prerequisite for all scenarios.
For UBS, this means continued investment in planning, potentially delaying full integration benefits. Investors should watch legislative developments: Reforms could ease burdens, boosting stock performance, but delays might heighten volatility.
Globally, the report offers lessons for mega-mergers, like potential U.S. bank consolidations, stressing the need for integrated crisis frameworks.
Conclusion: A Step Forward, But the Path to Stability Continues
FINMA’s 2025 UBS report marks tangible progress in resolvability amid the CS integration, but it candidly flags gaps in emergency planning and calls for legal evolution. As UBS solidifies its post-merger footing, this assessment underscores the delicate balance between growth and resilience. With Switzerland’s financial stability at stake, stakeholders await Federal Council actions to fortify the system against future shocks.
For the full report: https://www.finma.ch/en/news/2025/09/20250925-mm-resolution-bericht-ubs/
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