Foreign Bank Insolvency

The worst economic disaster since the great depression of 1929 took American and European banks by storm in 2008. The US, European countries and Russia, among others, had to step in to save some of their banks from bankruptcy. Even certain German banks, symbols of the country's strength and prosperity, were on the verge of collapsing. Against this backdrop, the purpose of this briefing is to provide a highlevel summary of the mechanisms in place to cope with the bankruptcy of a foreign bank in Switzerland.

The Swiss Financial Market Supervisory Authority (FINMA) is the competent authority to deal with the bankruptcy of foreign banks. At the request of the foreign bankruptcy administrator or a bankruptcy estate's creditor, FINMA must first recognise the foreign insolvency decree, as the foreign bankruptcy proceedings do not automatically extend to, nor deploy any immediate effects in Switzerland.