Swiss finance sector shrinks as regulators tighten control
Switzerland’s once-booming finance industry is shrinking, with tighter rules and consolidation pushing smaller banks and wealth managers out of the market.
According to the Swiss financial regulator Finma, only 1,570 financial institutions held licences as of last month — down sharply from more than 2,000 before new regulations took full effect in 2022. The number of private banks has also dropped to 82, compared with more than 100 a decade ago, and analysts warn that figure could fall below 70 by 2030, News.Az reports, citing foreign media.
Experts say the Financial Institutions Act (Finia), which extended supervision to smaller wealth managers and trustees, has significantly raised compliance costs. Many small firms managing under $100 million are struggling to survive.
The collapse of Credit Suisse in 2023 and its emergency takeover by UBS triggered even stricter oversight. Regulators are now preparing tougher “too-big-to-fail” (TBTF) rules that could force UBS to raise up to $26 billion in additional capital.
While other major financial hubs — including the US, UK, and EU — are easing or delaying similar regulations, Switzerland is moving in the opposite direction. Some industry figures warn that overregulation could hurt competitiveness and profitability, especially for smaller banks.
However, Finma argues that stricter rules are essential to prevent another crisis, insisting the goal is “sound governance and risk management,” not to overburden smaller players.
Despite the shake-up, over 200 new licence applications have been submitted since 2022 — showing that while Switzerland’s financial sector is becoming leaner, it remains one of the most trusted and regulated in the world.
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