Withdrawing a banking license is an extraordinary rarity in Switzerland, at least when it happens outside bankruptcy proceedings.

That is one reason the case of MBaer Merchant Bank attracts so much interest. Finma revoked the license on February 6, 2026.

The bank appealed to the Federal Administrative Court in St. Gallen, which granted the appeal suspensive effect in an interim ruling. For the time being, MBaer was able to keep operating.

The Last License Withdrawal: FlowBank

That lasted until February 27. On that day, the legal resistance was abruptly broken by a Notice of Proposed Rulemaking (NPRM) issued by FinCEN in the US (finews asked what triggered US authorities).

The last related incident came in the spring of 2024. Finma pulled the license of Geneva-based FlowBank while the appeal was still pending before the Federal Administrative Court, and the bank slid into bankruptcy in June 2024 for lack of capital.

The Precedent Before That Dates to 2003

With about 70 million Swiss francs ($88 million) in equity, MBaer was and is far from insolvent.

There is no truly comparable case in recent history, meaning a license withdrawal followed by an ordinary liquidation under the Swiss Code of Obligations. The last institution to lose its license, then withdrawn by Finma's predecessor, the Federal Banking Commission, was Bank Thorbecke.

It was taken over by St. Galler Kantonalbank in 2003, as documented in the EBK bulletin 45/2003 (German only).

In many respects, everyone involved in the MBaer liquidation is operating on uncharted ground.

Explicitly a Liquidation Under the Code of Obligations

Asked by finews, Finma confirms that MBaer Merchant Bank is undergoing a «liquidation under the Code of Obligations (CO) and not bankruptcy proceedings».

As liquidators, Finma appointed Daniel Staehelin, who leads the mandate, and Lukas Bopp, both of the Basel law firm Kellerhals Carrard.

An Agonizingly Slow Process

MBaer is now a textbook example of how agonizingly slow a bank liquidation can become.

Concrete figures are not available. According to information obtained by finews, as recently as a few weeks ago just 30 million francs had been paid out, from a total of roughly 5 billion francs in client assets as of the liquidation date, spread across some 700 client relationships.

Staehelin Stays Silent

Neither Finma nor liquidator Staehelin was willing to comment. Staehelin pointed to the supervisor instead.

«Might I ask you to put this [inquiry] to Finma, which supervises me,» he told finews in writing.

As recently as April, he had readily answered questions from the Swiss financial news site «Tippinpoint» (German only). Up to that point, he said, not a single franc had been paid out.

Finma and the National Bank Both Keep Quiet

Finma, for its part, refers to its general practice of not commenting on the status of individual liquidation proceedings it has ordered. That is for the liquidator alone, who in turn reports to Finma.

One temporary obstacle was payment traffic. With the withdrawal of its license, a bank in principle loses direct access to SIC, the interbank payment system for Swiss francs operated on behalf of the Swiss National Bank (SNB).

Access to SIC with an own giro account is conditional on holding a banking license.

March 20, 2026: SNB Removes MBaer From the Bank Master File

Notably, according to the publicly available mutation data of the Swiss bank master file kept by SIX (as of March 2026), MBaer formally lost its SIC access only on March 20, 2026. That was more than three weeks after the license withdrawal became legally binding.

Whether this was an automatic step or a separate order cannot be conclusively established. Asked by finews, both SIX and the SNB refer to each other and decline to comment on the individual case.

May 22, 2026: The Liquidators Find a Correspondent Bank

Finma does make clear that finding a counterparty, or correspondent bank, is fundamentally a matter for the bank in liquidation and its liquidators. It sets no requirements of its own regarding contractual relationships.

The search for a payments solution proved somewhat difficult. Only on May 22 did the liquidators announce they had found a way to make payouts in Swiss francs, British pounds, euros and UAE dirhams.

That covers Switzerland, the European Union excluding Bulgaria, the European Economic Area, Canada, Japan, the UK and Australia, as well as Singapore, the last of these once a bilateral mutual legal assistance agreement takes effect.

Who the correspondent banks are is not publicly known.

Redundant KYC Reviews

The process has since started, but it remains sluggish, as the figure of 30 million francs suggests.

The main reason for the slow payouts is the know-your-customer review. According to the bank's website, every payment is subject to a double check, one by MBaer's remaining compliance team and a second by the liquidator.

«All transfers are subject to a detailed KYC file review by MBaer's Compliance team, followed by the liquidators' Compliance team,» the bank states.

12 Lawyers on the Mandate

According to information obtained by finews, some 12 well-paid Kellerhals Carrard lawyers are working on the liquidation. Official confirmation could not be obtained.

What remains striking is that the client files had already been comprehensively re-examined in the years before the liquidation, as part of a process accompanied by Finma.

Around 30 percent of the client base left the bank during that clean-up, under Finma's watch.

Questionable Efficiency and Economics

That raises concerns about the efficiency, the duration and the economics of the liquidation proceedings.

Finma declined to answer the question of who ordered the doubly redundant KYC review. Was it the supervisor, was it the correspondent bank or banks, or was it the liquidator, acting on his own authority and in his own interest?

KYC: On What Basis?

Asked by finews whether the liquidator, remunerated on a time-spent basis, has an incentive to complicate or prolong the proceedings unnecessarily, Finma reacts sharply. It «firmly rejects» the «insinuation».

Agents appointed by Finma are subject to requirements for targeted and cost-efficient execution of their mandate, the authority says. Services drawn in have to be reviewed for economy, appropriateness and proportionality.

Legal Risks on Several Fronts

The delay carries legal risks for the bank on several fronts. Clients in principle have a barely conditional claim to immediate payout of their assets.

How a KYC review running for months is supposed to protect the bank from such claims or lawsuits by its own clients remains an open question.

Equity as the Liquidator's Pot

According to information obtained by finews from a reliable source, the liquidators' mandate is budgeted at total fees of around 11 million francs, based on an estimated duration of about ten years.

By comparison, the bank's equity stood at roughly 70 million francs at the time the license was withdrawn.

Finma, which controls the proceedings, would neither confirm, deny nor comment on these figures when asked by finews.

Shareholders Are Unhappy as Well

Criticism is also mounting on the shareholder side. Several shareholders told finews they were annoyed that, to their knowledge, no liquidation opening balance sheet has been drawn up, as Finma's own guidance requires, and no general meeting has been convened, as the Code of Obligations demands.

Both would have been called for, as they understand it. Finma's guidance on the proper execution of mandates by appointed agents states that an opening balance sheet must be drawn up «within four weeks of the liquidation being ordered». In the MBaer case, that window closed months ago.

«Written Instructions to the Contrary»

Finma argues that «written instructions from Finma to the contrary» are possible in individual cases, without elaborating on this particular one.

To more probing questions, Finma responded evasively, referring to general principles, to the confidentiality of the supervisory relationship, or to the other authorities involved.

Most Assets Blocked, Duration Unclear

For the roughly 700 clients affected, the bottom line is this. A good half a year after the historically rare step of a banking license withdrawal followed by a liquidation under the Code of Obligations, the bulk of their assets remains blocked.

How long this will actually drag on, and at what price, is something no one in Bern or Basel is willing to say.