In its recently published Annual Report, the FBC outlined certain long-overdue measures to enhance the future cooperation between the two supervisory bodies. These measures were triggered by Zurich Financial Services Group's recent application to the FBC for a permit to operate a bank in Switzerland. The FBC - which already supervises the Swiss financial conglomerates UBS and Credit Suisse Group - was particularly concerned by the fact that, following the merger between Zurich Insurance Group and British American Tobacco Financial Services, Zurich Financial Services Group would emerge as a new and dynamic force in the market, but would be supervised in Switzerland solely by the FIO, and on an unconsolidated basis only.
Although Zurich Invest Bank, the bank operated by Zurich Financial Services Group, is a fully fledged bank largely independent of its sole shareholder, Zurich Insurance Company, the FBC ordered that the external auditors report to the FBC on all activities that the bank outsources to its parent company, in particular those relating to the acquisition of clients. The FBC and the FIO will present a plan for the consolidated supervision of Zurich Financial Services Group by the end of this year. This plan will set a standard for cooperation between the FBC and the FIO and will close a gap in the supervision of the financial services market in Switzerland. This new approach must be viewed in light of the international standards set by the Basle Committee on Banking Supervision and the International Organization of Securities Commissions.