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Swiss financial market supervisor FINMA has observed that the Ukraine crisis does not constitute a wide-scale threat to the country’s financial sector while posing ‘multi-layered risks’ for the banks.

FINMA CEO Urban Angehrm pointed out outstanding loans made by the banks to Russian debtors or direct investments in Russian securities as one of the potential financial risks.

He also said that derivatives trading with underlying Russian assets or with sanctioned Russian counterparties could also be problematic.

The disruption in commodities trading could result in losses, he added.

Angehrm said: “In respect of the Ukraine war, we can summarise by saying that this conflict poses numerous risks for the Swiss financial sector and accentuated risks for individual institutions. We are keeping a watchful eye on these.”

According to the FINMA chief, the Russian business of Swiss financial institutions is ‘not insignificant overall’ and is ‘relatively small’ when compared to other target markets.

Overall, the risks to the financial centre from first round effects are manageable even if there are some institutions with strong exposure, he noted.

Angehrm added. “We are continuing to monitor the situation to see whether the war has further, indirect effects on the financial markets. Above all, however, we wish and hope that this conflict will be resolved as soon as possible.”

Last month, the Swiss Bankers Association (SBA) revealed that wealthy Russians have stashed away more than $200bn in the country’s banks.

According to SBA estimates, Swiss banks may hold between CHF150bn and CHF200bn on behalf of Russian clients in offshore accounts.