The parliamentary commission of inquiry (PUK) has concluded that years of mismanagement at Credit Suisse (CS) led to its downfall, while also highlighting failures by the federal government in regulating the bank. The PUK found no misconduct by authorities during the crisis but called for improved financial supervision and better communication among regulatory bodies. Criticism was directed at former CS executives and Finance Minister Ueli Maurer for their roles in the bank's issues, particularly regarding compliance with supervisory demands.
Ueli Maurer, Switzerland's former Finance Minister, faced criticism for withholding crucial information about Credit Suisse's precarious situation from his Federal Council colleagues. His solitary approach and lack of transparency hindered effective management during the bank's crisis, ultimately leading to significant challenges for the government as it navigated the fallout from the bank's instability.
Former Credit Suisse executives and Swiss authorities attended hearings regarding the management of the CS crisis, with the PUK set to make twenty recommendations to the Federal Council by spring 2025. The report criticizes the lack of tools available to authorities and highlights the need for improved cooperation and information sharing among them. The PUK also noted that the handover of responsibilities from former Finance Minister Ueli Maurer to Karin Keller-Sutter was inadequate, particularly concerning the critical CS dossier.
The Parliamentary Commission of Inquiry (CEP) is investigating the failures that led to Credit Suisse's collapse, focusing on the roles of key officials and the interaction between financial authorities. The report, expected soon, will address whether regulatory bodies like Finma should have acted sooner and if they need more powers to prevent future crises. Additionally, it will explore the adequacy of capital requirements for major banks in Switzerland.
UBS is shifting its wealth management strategy in the U.S. to target a broader client base beyond the super-rich, aiming to enhance profitability amid high competition and costs. The bank plans to invest in technology and advisors while reorganizing into six divisions, seeking a national bank license to offer more services. However, past attempts to expand, such as the failed acquisition of Wealthfront, raise questions about the success of this new approach.
Barclays plans to boost its annual tech spending for wealth management by over 75% and aims for a 25% return on tangible equity by 2026, focusing on markets like Singapore, India, and the Middle East, while avoiding the competitive U.S. market. In contrast, UBS is expanding its U.S. wealth business through organic growth, realigning into six divisions to better serve various client segments, and pursuing a national banking charter to enhance profitability. Both banks are targeting the mass-affluent market, with Barclays looking to hire up to 100 advisers in the U.K.
AllianceBernstein plans to sue Switzerland for $225 million over the $17 billion wipeout of Credit Suisse's AT1 bonds, arguing that the Swiss government favored shareholders while leaving debt investors empty-handed. This lawsuit could impose significant financial stress on Swiss taxpayers, reminiscent of past bailouts where UBS benefited while the public bore the costs. The Ministry of Finance has engaged Wachtell law firm for defense, raising questions about the influence of UBS in the proceedings.
AllianceBernstein plans to sue Switzerland for $225 million over the $17 billion wipeout of Credit Suisse's AT1 bonds, arguing that the Swiss government unfairly prioritized shareholders over debt holders. This lawsuit, filed in New York, raises concerns about potential financial repercussions for Swiss taxpayers, reminiscent of past bailouts where UBS benefited while the public bore the costs. The outcome could significantly impact the credibility of Swiss financial authorities and their handling of the crisis.
The upcoming PUK report on the Credit Suisse bankruptcy is expected to heavily criticize the Financial Market Authority (FINMA) and the Swiss National Bank (SNB) for their inadequate crisis management. Despite having the necessary tools, FINMA failed to intervene effectively, while the SNB's delayed response left markets unsettled. The report will also address the need for stronger oversight and a more competent Board of Directors at FINMA, highlighting a disparity in how the authority handles smaller versus larger financial institutions.
The upcoming PUK report on the Credit Suisse bankruptcy is expected to heavily criticize the Financial Market Authority (FINMA) and the Swiss National Bank (SNB) for their inadequate crisis management. Despite having the necessary tools, FINMA failed to intervene effectively, while the SNB's delayed response left Credit Suisse vulnerable, culminating in its forced merger with UBS. The report will also address the need for stronger oversight and a more competent Board of Directors at FINMA to better handle future crises.
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