ZURICH (Reuters). – UBS Credit Suisse (SIX) made more progress on how they would stabilize and restructure in a financial crisis. This was according to FINMA, a Swiss financial watchdog.

Large Swiss banks should demonstrate how they will handle an emergency situation, and how they can be restructured to liquidate themselves without obstacles.

The watchdog released a statement saying that FINMA saw further improvements in global resolvability for large Swiss banks Credit Suisse, UBS. They significantly decreased the obstacles that prevented the execution of the resolution strategy.

FINMA has also approved recovery plans for both big banks.

It stated that “FINMA continues to consider the Swiss Emergency Plans of Credit Suisse and UBS effective.”

The ability to resolve a bank’s systemically significant financial institution in crisis or allow it to leave the market through bankruptcy without compromising its financial stability is called “solvability”.

These are part of the so-called Too Big to Fail Swiss rules. They aim to reduce risks to the financial sector and avoid taxpayer-funded bailouts.

FINMA stated that the plans for emergency relief of other important domestic banks – PostFinance Raiffeisen Zuercher Kantonbank and Raiffeisen – were not yet ready.

FINMA stated that “none of these banks have retained sufficient loss-absorbing money to allow them to be recapitalised, and their operations continued during a crisis.”