The recent report from the Parliamentary Investigation Commission (PUK) on the collapse of Credit Suisse (CS) has sparked a discussion about the effectiveness of regulatory oversight and crisis management in the Swiss financial sector.
The commission's findings highlight failures in early crisis detection and the need for improved cooperation among financial authorities. The report emphasizes the need for enhancements in information sharing, risk management, and the establishment of mechanisms for early crisis detection.
The commission's work aimed to scrutinize the actions of authorities leading up to the emergency merger of Credit Suisse with UBS in March 2023. The report raises questions about the effectiveness of Finma's interventions and criticizes the Federal Council for its hesitancy in implementing the Public Liquidity Backstop (PLB).
The management and board of directors of Credit Suisse are seen as central to the crisis, raising questions about governance structures within major financial institutions. Former Finance Minister Ueli Maurer has come under scrutiny for his handling of information related to the Credit Suisse crisis.
The report calls for a reevaluation of the regulatory framework governing major financial institutions in Switzerland and advocates for an internationally oriented "Too Big to Fail" (TBTF) regulation. The report emphasizes the importance of ensuring that banks maintain sufficient capital resources and that the possibility of obtaining regulatory relief is restricted.
The findings of the PUK serve as a reminder of the complexities involved in financial regulation and the need for continuous improvement in oversight practices.