LIECHTENSTEIN Law and Practice Contributed by: Bernhard Rankl, Moritz Blasy and Nicolai Binkert, Schurti Partners Attorneys at Law Ltd
banks improve their overall resilience to digi - tal risks. Banks are expected to participate in industry-wide initiatives, such as sector-specific information-sharing platforms, to stay ahead of
often referred to as Basel IV. This comprehen - sive reform package, developed by the Basel Committee on Banking Supervision (BCBS), will further strengthen capital and liquidity require - ments for banks with the aim of enhancing finan - cial stability and reducing systemic risk. The changes are comprehensive and far-reach - ing, with a strong emphasis on limiting the use of sophisticated internal models that could lead a bank to underestimate its portfolio risk and, consequently, its capital requirements. In line with this objective, Basel IV introduces a new output floor, which limits how much a bank’s internally calculated capital requirements can deviate from those calculated under the stand - ardised model. In addition, the revised frame - work introduces changes to the way banks cal - culate risk-weighted assets (RWA), with stricter capital requirements for certain asset classes. The implementation of Basel IV has been extend - ed due to the COVID-19 pandemic, entering into force on 1 January 2025. Banks in Liechtenstein will need to adjust their capital adequacy cal - culations, adjust their portfolios and prepare for increased capital requirements. Anti-money Laundering (AML) and Combating the Financing of Terrorism (CFT) AML and CFT regulations continue to evolve across Europe, and Liechtenstein is expected to further strengthen its AML/CFT framework in line with international standards set by the Financial Action Task Force (FATF) and EU directives. Sixth Anti-Money Laundering Directive (Directive (EU) 2024/1640; AMLD VI) The Sixth Anti-Money Laundering Directive (AMLD VI) is the latest update to the EU’s AML framework, and Liechtenstein will need to incor - porate its provisions into national law within
evolving digital threats. Proportionality Principle
DORA applies the principle of proportionality, meaning that smaller banks or those with less complex digital infrastructures may be subject to less stringent requirements than larger, more systemically important institutions. The FMA ensures that the regulatory burden is appropri - ately scaled to the size, complexity and risk pro - file of each bank, allowing for a flexible approach while maintaining the overarching goal of digital resilience. The banking sector in Liechtenstein is closely linked to European and global regulatory devel - opments, as the country is a member of the European Economic Area (EEA). This member - ship requires Liechtenstein to adopt much of the regulatory framework established by the European Union (EU), particularly in the area of financial services. As the global regulatory land - scape continues to evolve, a number of upcom - ing developments are expected to impact banks in Liechtenstein in the short to medium term. These developments are aimed at strengthening financial stability, enhancing digital resilience, promoting sustainable finance, and increasing transparency in the banking sector. Basel III Finalisation (Basel IV) 11. Horizon Scanning 11.1 Regulatory Developments One of the most significant upcoming regula - tory changes affecting banks in Liechtenstein will be the finalisation of the Basel III framework,
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