The recent report from the Parliamentary Commission of Inquiry (PUK) has highlighted the failures in crisis management that led to the downfall of Credit Suisse (CS).
The commission's findings emphasize the need for significant reforms in the oversight and regulatory frameworks governing Switzerland's financial institutions. The investigation concluded that while the Federal Council's use of emergency law was lawful, there were critical areas for improvement.
The report points to the lack of effective collaboration and communication between various authorities as a significant factor in the failure to detect the brewing crisis at CS in a timely manner.
The report raises questions about the enforcement powers of FINMA, which had been monitoring CS but struggled to mitigate the impact of ongoing scandals. The PUK criticized the Federal Council for its hesitance in implementing the Public Liquidity Backstop (PLB), a measure that could have provided crucial support during the tumultuous period.
The commission also highlighted the need for a more robust regulatory framework to prevent such failures in the future, particularly in light of UBS's status as the only remaining Global Systemically Important Bank (G-SIB) in Switzerland.
The conduct of former Finance Minister Ueli Maurer has come under scrutiny in the PUK's findings. Maurer is criticized for his inadequate communication with the Federal Council regarding the CS situation, which hindered the council's ability to respond effectively to the crisis.
The transition of responsibilities to the current Finance Minister, Karin Keller-Sutter, was also marked by insufficient handover of critical information related to the CS dossier. The PUK's findings suggest that a more structured approach to information sharing and crisis management is essential for future governance.
In light of the PUK's findings, there is a clear call for reform in the regulatory landscape governing Swiss banks. The report advocates for enhanced measures to ensure that banks are sufficiently capitalized and that the possibility of obtaining regulatory relief is limited.
Improved risk management practices and better information exchange among regulatory bodies are seen as critical steps toward preventing future crises. The PUK's work highlights the need for a comprehensive review of existing regulations to adapt to the evolving landscape of global finance, ensuring that Swiss banks can withstand potential shocks and maintain public confidence.