ZURICH, Oct 15 (Reuters) - UBS must improve its

emergency plans following its takeover of Credit Suisse to

ensure the bank can be wound down or sold without risking

financial stability and taxpayer cash, Swiss regulator FINMA

said on Tuesday.

FINMA said it had suspended the annual approval of UBS's

recovery and emergency plans while Switzerland's last globally

systemically important bank develops its approach as it

integrates Credit Suisse.

"Based on the experience of the Credit Suisse crisis,

additional options for action are required to further strengthen

crisis preparations and resolution planning for systemically

important banks," FINMA said in a statement.

UBS said it had already begun work on further developing its

existing emergency plans "in a targeted manner."

"As FINMA confirmed in its press release, UBS meets the

current requirements to be resolvable in accordance with the

preferred restructuring strategy in the event of a crisis," the

Swiss bank said in a statement.

FINMA said UBS's emergency plan must ensure the Swiss

entity can continue to operate without interruption even if

there were a risk of insolvency.

"In its emergency plan, UBS must in particular revise

the liquidity planning and the refinancing of the Swiss entity

when the emergency plan is activated," the regulator said.

The Credit Suisse crisis had highlighted problems

related to the speed and extent of deposit withdrawals, and

there needed to be a stronger focus on measures to generate

liquidity, it added.

UBS bought Credit Suisse in an emergency rescue in March

2023 after the latter a liquidity crisis.

The collapse of the country's second-largest lender

prompted deep soul-searching among Swiss financial authorities

and promises to make the system more robust.

FINMA has repeatedly called for

greater powers

to oversee banks, after it was accused of doing too little

to prevent the implosion of Credit Suisse.