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Russia Poses ‘Multi-Layered Risks’ for Swiss Banks, Finma Says

Russia’s invasion of Ukraine and the ensuing sanctions imposed by the EU and Switzerland pose multi-layered risks for Swiss banks.

Russia Poses ‘Multi-Layered Risks’ for Swiss Banks, Finma Says
A sign for Credit Suisse Group AG at the bank's headquarters in Switzerland. (Photographer: Stefan Wermuth/Bloomberg)

Russia’s invasion of Ukraine and the ensuing sanctions imposed by the EU and Switzerland pose “multi-layered risks” for Swiss banks even if the conflict doesn’t impose a “wide-scale threat,” Switzerland’s banking regulator warned.

The outstanding loans banks may have made to Russian debtors or direct investments in Russian securities pose one potential problem, Finma chief Urban Angehrn said Tuesday in a speech in the Swiss capital Bern. Derivatives trading with underlying Russian assets or with sanctioned Russian counterparties could also be problematic, he said. He also pointed to the risk of losses as a result of disruption in commodities trading. 

Speaking at his first annual press conference since taking over as head of Finma, Angehrn stressed that he believes Swiss banks are taking the sanctions imposed on Russian oligarch and officials “very seriously.” There may be more than $200 billion worth of Russian wealth held by Swiss banks, according to the industry’s main lobby group in the country, and authorities have to date blocked close to $6 billion in assets. 

Dealing with these sanctions “is by no means new for the institutions, but the scale and complexity have increased sharply,” Angehrn said, adding that Finma has been in contact with Credit Suisse Group AG and UBS Group AG and Switzerland’s other major banks on the topic.  “Correctly enforcing sanctions requires the utmost care.”

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