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Switzerland’s monetary regulator has known as for harder powers to supervise banks after claiming it did all the things it might to attempt to stop the collapse of Credit score Suisse this 12 months.
Finma on Tuesday revealed an 84-page report into the failure of Credit score Suisse, which despatched shockwaves by way of the Swiss monetary system.
It discovered the 167-year-old financial institution’s downfall was the results of “insufficient implementation of its strategic focus areas, repeated scandals and administration errors”.
Thomas Hirschi, head of Finma’s disaster unit and banks division, stated the regulator noticed issues at Credit score Suisse early and “used its full vary of instruments” to attempt to stabilise the financial institution.
“Though its actions had an impact, they have been unable to beat the causes of the lack of confidence, reminiscent of shortcomings in technique implementation and in danger administration,” he added.
Switzerland’s monetary regulatory system has lengthy been criticised internationally for missing the authority of its world friends and permitting banks to function with the specter of minimal punishments for misdeeds.
Within the report, Finma stated that to enhance its oversight of the finance sector, it might want to have the ability to effective firms. It additionally known as for the introduction of a senior managers’ regime, just like the system within the UK, the place there may be a lot larger private accountability for executives.
The calls echo these made final month by Sergio Ermotti, chief government of UBS, which agreed to rescue Credit score Suisse in March.
Ermotti was endorsing a bundle of reforms to Switzerland’s banking guidelines introduced by a government-appointed panel of economic specialists in September.
Among the many primary findings of the parliamentary group, which was tasked with analysing the near-collapse of Credit score Suisse, was that Finma was too weak to deal with banking crises adequately.
As a part of its report on Tuesday, Finma set out intimately its strategy to supervising Credit score Suisse in its ultimate scandal-plagued years.
Since 2012, Finma stated it performed 43 preliminary investigations into the financial institution for potential enforcement proceedings, issued 9 reprimands, filed 16 prison fees and accomplished 11 enforcement proceedings in opposition to the financial institution and three in opposition to people. It added that 11 of those 14 proceedings happened since 2018.
“Finma constantly knowledgeable Credit score Suisse of dangers, known as for enhancements, and imposed far-reaching measures,” the regulator stated. “These included intensive capital and liquidity measures, interventions within the financial institution’s governance and remuneration, and restrictions on enterprise actions.”
It stated that between 2018 and 2022, Finma performed 108 on-site supervisory opinions on the financial institution and recorded 382 factors requiring motion — 113 of which have been classed as excessive or essential danger.
“These figures and measures illustrate that Finma exhausted its choices and authorized powers,” the regulator stated.