The recent report from the Parliamentary Commission of Inquiry (ICC) has shed light on the downfall of Credit Suisse, attributing it to years of mismanagement by its leadership.
The report also highlights significant shortcomings in oversight and communication by regulatory authorities. The investigation reveals that Credit Suisse's management failed to address warning signs, and the Swiss Financial Market Supervisory Authority (FINMA) was criticized for not revoking the bank's guarantee of irreproachability.
In response to the crisis, the ICC has proposed 20 recommendations for reforming the regulatory landscape, including the establishment of an international framework for "too big to fail" regulations. The report emphasizes the need for improved communication and information sharing among regulatory bodies.
Despite the mismanagement, Swiss authorities played a crucial role in averting a global financial crisis by urging Credit Suisse to prepare for an emergency sale and acting as mediators during negotiations with UBS.
The findings of the ICC highlight the complexities involved in managing systemically important financial institutions and the interplay between mismanagement and regulatory oversight. The recommendations put forth by the ICC may lead to more robust regulatory frameworks.