Switzerland is in need of "strong financial sector reforms" following on from the state-driven rescue takeover of Credit Suisse by UBS, according to the International Monetary Fund.

"The state-facilitated acquisition of Credit Suisse by UBS has stabilised the financial markets, but the experience and prospects also call for strong financial sector reforms," the IMF stated following the conclusion of its review of the Swiss economy.

The International Monetary Fund is the latest international organisation to express concerns about the implications of the enlarged UBS and the associated risks it presents to Switzerland's economy, Reuters reports.

This sentiment echoes recent warnings issued by the Organisation for Economic Cooperation and Development (OECD) last month.

In addition, the Financial Stability Board, a group of central bankers, treasury officials and regulators from the group of 20 top global economies, has also noted the potential risk that a failure of UBS could pose to Switzerland and has urged the government in Bern to bolster its regulatory oversight of banks.

Head of the IMF delegation, Pelin Berkmen, said the lender's recommendations outlined in 2019 are still relevant. Such measures included more power for Switzerland's financial regulator, FINMA, including the ability to impose fines on bank executives and provide transparency regarding its enforcement actions.

"We still believe that our recommendations are relevant and going forward we would hope the Credit Suisse case will put forward in terms of the lessons of what needs to be changed from the authorities' perspective," Berkmen said during a press conference in Bern.

The IMF is due to undertake a more detailed review of Switzerland's financial sector later in the year for a report to be published in early 2025.

In addition, the Swiss government is also set to outline its own proposals concerning banking regulation this month.