Your organisation's submission goes to FINMA, not the SSM. The reverse test does not change with the supervisor.
Cycle 1 ran the reverse stress test for an SSM-supervised Italian bank. This is the same method for a Swiss CHF universal bank under FINMA, the transfer test. What changes is the audit calibration, not the reverse spine: the geopolitical event, the reverse-test discipline and the four-channel cascade carry across supervisory regime without re-engineering. Every claim drillable to a primary source; the archetype anonymised throughout.
The supervisor sets the number. The reverse test reads the path backwards.
Your organisation's FINMA submission starts from a prescribed outcome the same way an SSM submission does. The ~300bp CET1 depletion is a given, set by the supervisor as a floor across the exercise, not derived by your team's model, and not a BearingA computation.
The 2026 SSM reverse-test discipline set the shape of the exercise across euro-area banks SOURCE 219. FINMA reads its own institutions through the Risk Monitor lens SOURCE 084 rather than through a mirror-image of the ECB thematic, but the analytical question your organisation's book has to answer is invariant across both: through what plausible geopolitical event a balance sheet like yours reaches a depletion of that order, and through which channels in your own exposure it transmits.
The number is settled. The path is your organisation's to defend, and it is the same path the reverse test builds under either supervisor.
Your organisation's book does not meet five shocks. It meets one geopolitical event.
The five signals your risk committee reads down every quarter (Iran and the US, Hormuz, Russia and Ukraine, Xi and Trump, Turkey) are not five hits landing in parallel. They are one loop that sustains itself, and a Swiss book meets it through its own exposures.
Iran closed the strait on 28 February, and the US responded without forcing it back open. Hormuz has carried the physical transmission ever since: commercial shipping displaced onto longer routes, insurance markets repricing, P&I cover withdrawn. Underneath sits an economic incentive the disruption does not dissipate: Russia's flow finds better terms in a market shaped this way than in a market not shaped this way, and as long as that holds, the closure has an economic underwriting no single-signal analysis names. Trump and Xi modulate what escalates because sanctions and trade posture depend on both sides in every direction, and Turkey moves along whatever routes the four leave open. The safe-haven character of a Swiss balance sheet does not exempt it from this loop; it reshapes which channel dominates. CHF appreciation and net-interest-margin compression lead the transmission through a Swiss book rather than the credit-first path a periphery book takes to reach the same depletion.
Hormuz today: the observed state
Hormuz is not a forecast. It sits at entrenched closure, Day ~159 from the 28 February action, after a full arc across spring and summer: Islamabad MoU on 17 June, collapse between 7 and 12 July, the strait declared closed until further notice. War-risk insurance at roughly eight times pre-crisis, P&I cover withdrawn SOURCE 204 · 205 · 207. That is the state your organisation's book is exposed to now.
Four channels. One ordered cascade.
Your organisation's exposure meets this geopolitical event through the ECB's own transmission taxonomy: financial market, real economy, safety and security, with a policy layer over all three SOURCE 073, and the channels resolve in an order rather than at once.
The reason the order matters for the depletion is asymmetry. Across 47 years of BIS confidential banking statistics over roughly 12,000 country pairs, negative geopolitical events cut cross-border credit 10 to 20 percent more between blocs than within them, while positive events produce no matching increase, because the trust international bank credit requires does not rebuild at the pace it breaks SOURCE 068. Capital retreats hard and returns slow, so the credit leg leads and lingers, and the NIM leg rides on top of it.
Which way this geopolitical event breaks, and what tips it.
Your team needs the direction the event breaks and the trigger that tips it, before your organisation's book registers the move.
Phase identification runs on HMM regime characterisation at p<0.001; the phase-by-cluster pattern is observable in the event's own trace. Three directions can tip the current phase, each through a specific geopolitical trigger onto the ordered cascade above.
Corridor authority hardens
Both legs deepen through your organisation's book: credit-impairment and CHF-driven NIM compression compound rather than offset, because the safe-haven flow that would otherwise cushion the second leg is the same move every peer bank is crowding into.
Closure entrenches as regime
The strait runs as a priced corridor. Costs accrue through the sustained credit leg, quarter by quarter, in the register of impaired margins across your energy-intensive and leveraged-finance counterparties. The NIM leg eases as rates settle and the crowd trade unwinds.
Genuine reopening
A durable political settlement, not an MoU interlude that unwinds inside a fortnight. The spot market reprices fast; the credit leg does not. The depletion your organisation's book has taken does not unwind at the pace it arrived, because trust in cross-border credit does not rebuild at the pace geopolitical rupture breaks it.
One path shown. One method you run yourself.
Your organisation's submission needs a number the risk committee can stand behind under FINMA scrutiny, and it needs the method that produced the number more than the number itself. Any specific figure a narrated path yields is illustrative; the method your analysts run against your own book is what the submission actually stands on.
The path narrated below goes from this geopolitical event to a depletion of the ~300bp order, in enough detail for your team to see the shape. What matters more than any specific figure the path lands is the method that produced it: the reusable procedure your analysts run against your own book, feeding ICAAP Principles 4, 6, and 7 (risk identification, quantification, stress-testing) SOURCE 065. Take the narrated path as a shape reference. Take the method as what the submission stands on.
Where the arithmetic quietly misleads
The 2026 SSM results credit mitigating actions with a real offset: CET1 15.5 percent at end-2025, 12.1 before actions, 13.6 after. The report itself flags them as potentially over-optimistic under a systemic crisis where many banks reach for the same actions at once SOURCE 219 · Chart 5, the fallacy-of-composition caveat the reverse exercise names but does not compose. A safe-haven bank feels this sharply: the CHF strength that cushions one leg is the same move every peer bank is crowding into. Mitigating actions are shared. You cannot all sell the same assets into the same stressed market, raise capital from the same investors, or reprice into the same demand-compressed book at the same moment your peers do.
Where BearingA stops and your book begins.
FINMA cares exactly where the line falls between what a third party can read for you and what only your own team can compose, and it falls in the same place it does under the SSM.
BearingA reads this geopolitical event and its transmission through your organisation's book, at production cadence, with every load-bearing claim drilled to a primary source. Your team holds the book data, runs the quantification inside your audited framework, and owns the submission. The division is not BearingA's boundary; it is the supervisor's data-quality framing, and the read composes to it SOURCE 071.
That the boundary holds unchanged from Cycle 1 is the transfer test passing: the reverse test reads a Swiss FINMA book with the same discipline it read an Italian SSM one, and stops at the same line.
