The Credit Suisse debacle highlights the inadequacies of the "too big to fail" law, revealing a significant capital problem exacerbated by regulatory fatigue and political influence from the banking lobby. Despite expert warnings and evaluations, the lack of effective oversight allowed systemic risks to persist, culminating in a crisis that questioned Switzerland's capacity to manage large international banks. The PUK's findings underscore the complexities of regulatory frameworks and the need for substantial reform to ensure financial stability.
The PUK report on Credit Suisse highlights the failures of the "too big to fail" regime, revealing that despite existing laws, regulatory oversight was inadequate, allowing the bank to operate with insufficient capitalization. Political influence and lobbying led to detrimental regulatory decisions, exacerbating the crisis. The report underscores the need for a reevaluation of Switzerland's banking regulations to prevent future failures.
Aymo Brunetti, a professor at the University of Bern, emphasized the critical need for an orderly resolution framework for major banks like UBS, especially following the forced merger with Credit Suisse during the 2023 crisis. He warned that without a "Too Big To Fail" regime, UBS faces dire consequences if it were to fail. Brunetti spoke at the Financial Market Authority Liechtenstein's stability report presentation for 2024.
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