FINMA position paper on legal and reputational risks in cross-border financial services

Submitted on 29th July 2015

The financial services sector is a major contributor to the Swiss economy. The business models of many wealth management banks are strongly focused on cross-border services for private clients resident outside Switzerland. Some insurers have also increasingly transacted business with cross-border elements in recent years. The challenges surrounding these business models do not just impact on individual financial institutions, but also the economy as a whole.
The legal and reputational risks associated with cross-border financial services have increased markedly in recent years, to the extent that they could threaten the continued existence of some institutions and have a destabilising effect on the economy. These risks do not just concern banks and insurers, but also other financial services providers involved in cross-border activity.
This position paper outlines these legal and reputational risks as identified and analysed by FINMA, and provides clear guidance on how FINMA expects supervised institutions to deal with such risks.

Swiss Financial Market Supervisory Authority FINMA
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