The Swiss Financial Market Supervisory Authority (FINMA) reported that institutions under its supervision maintained stability through 2025 despite intensifying financial and non-financial risks from the conflict in Ukraine, Middle East turmoil, and trade tensions with China. Swiss financial entities benefited from the country's stable institutional, political and legal framework, according to a speech by FINMA's Stefan Walter at the annual media conference.
Capital positions at banks and solvency ratios at insurers remained stable throughout the year, while banking liquidity buffers stayed at elevated levels. FINMA conducted its first-ever stress tests for Swiss investment funds alongside detailed analyses and on-site inspections, prompted by international requirements. The exercise found that 8.2% of bond funds and 3.3% of equity funds would face insufficient liquidity under a stress scenario. FINMA carried out in-depth investigations into those funds.
Real estate and mortgages continued to be among the biggest risks for the Swiss financial centre, posing credit-default and property-valuation threats. Some banks pushed the limits of principles-based mortgage regulation too far, FINMA said, leading the regulator to demand strengthened risk management and impose capital surcharges on several institutions with excessively loose lending criteria, strong lending growth and undervalued real estate. FINMA also published new guidance on mortgage-lending requirements.
On climate and nature-related financial risks, FINMA held supervisory discussions with the largest banks and insurers about growing physical risks from climate change and conducted one-day on-site inspections at individual banks with elevated climate-risk profiles. At UBS, FINMA and the Swiss National Bank jointly carried out a climate scenario analysis that identified the greatest loss potential in the corporate loan portfolio.
Operational resilience was another focus, driven by the growing concentration of outsourced core IT systems among a small number of service providers and the associated cyber-attack exposure. FINMA increased scrutiny of organisational structures in cybersecurity within authorisation and supervisory processes, participated in establishing a national crisis organisation for cyber incidents, and worked with the Federal Department of Finance, the SNB and other bodies to accelerate preparedness for a coordinated rapid response in a crisis.
On client protection, FINMA stepped up enforcement in 2025, particularly around suitability assessments for complex products with high loss potential. The regulator found that some customers were being directed into illiquid and risky assets without adequate checks on risk capacity and tolerance, and intervened decisively in breaches of conduct rules under the Financial Services Act. FINMA continued to place increasing emphasis on preventive supervision, conducting more deep-dives at supervised institutions to engage directly with boards, management, compliance and internal audit functions and tackle root causes early.
