FINMA director Stefan Walter told participants at the Kleinbankensymposium in Bern that proportionality remains the core principle of Swiss banking supervision. He rejected criticism that small banks face excessive scrutiny, emphasizing that supervisory effort is calibrated to an institution’s size, complexity and, most importantly, its risk profile.
Walter highlighted the disparity in on‑site inspections to illustrate the risk‑based approach. While the regulator conducts more than 40 visits to UBS each year, a typical small bank is inspected only once every eight to ten years. He added that in 2025 the authority carried out twelve times more on‑site checks at institutions with medium or high risk ratings than at those with low ratings.
The Kleinbankenregime, introduced in 2020, provides a concrete example of proportional regulation. It grants well‑capitalised and liquid banks in categories 4 and 5 relief from calculating risk‑weighted assets and eases liquidity, risk‑control, internal audit and disclosure requirements. These concessions apply only where the banks’ risk exposure is demonstrably low.
Walter warned that proportionality does not equate to reduced oversight in high‑risk areas. Anti‑money‑laundering, market conduct and sanctions compliance remain uniformly stringent, regardless of bank size. Likewise, responsibilities for cyber‑risk and outsourcing governance stay with each institution.
He noted that emerging technologies such as cloud services and artificial intelligence create both opportunities and new risk vectors. Consequently, supervisory frameworks must stay flexible, adapting to shifting risk landscapes, including geopolitical tensions, cyber threats and potential contagion among smaller banks.
The regulator’s stance underscores a targeted allocation of supervisory resources, concentrating on entities whose failure could jeopardise the broader financial system while easing the burden on stable, low‑risk banks.
