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The PUK report on the Credit Suisse (CS) bankruptcy criticizes the Financial Market Supervisory Authority (FINMA) for failing to intervene earlier, despite numerous investigations and measures since 2012. It highlights that FINMA's existing tools could have been more effectively utilized, particularly in collaboration with the National Bank, to prevent the crisis. The report suggests strengthening supervision and improving the Board of Directors' expertise, while also addressing the disparity in FINMA's enforcement actions between smaller and larger financial entities.
Tensions rise ahead of the Credit Suisse investigation report, with former Finance Minister Ueli Maurer facing scrutiny for his inaction during the crisis. Current Minister Karin Keller-Sutter is seen as a decisive figure, while former executives like Axel Lehmann grapple with legal uncertainties. The report may intensify potential legal actions against those involved.
The Parliamentary Investigation Committee (PUK) is set to release its long-awaited report on the end of Credit Suisse, following a year and a half of inquiry. The report comes amid widespread resentment over the federal government's use of emergency law to rescue the bank from bankruptcy after UBS's takeover in March 2023. Key figures such as Marlene Amstad, Ueli Maurer, Thomas Jordan, and Karin Keller-Sutter are closely scrutinized as the implications of the report unfold.
FINMA is intensifying its crackdown on the investor network Moonshot, apartment broker Le Bijou, and a Bernese restaurant, raising concerns about the proportionality of its actions. The authority seeks expanded powers, including the ability to impose fines and conduct more on-site inspections, following its perceived failures during the Credit Suisse collapse. Critics argue that its aggressive interventions, which have halted operations and led to financial ruin for several companies, highlight the need for stricter oversight of FINMA"s own activities.
The Swiss Financial Market Supervisory Authority (FINMA) has set new strategic goals for 2025-2028, yet its performance from 2021-2024 has been criticized as ineffective, particularly in ensuring the stability of financial institutions and managing risks. The downfall of Credit Suisse highlights significant failures in supervision, stress testing, and risk management, raising concerns about the authority"s ability to support innovation in the financial sector. As it embarks on a new strategy, FINMA must improve its operational excellence and accountability to remain relevant.
The Federal Council has endorsed Finma's strategic objectives for 2025-2028, focusing on enhancing preventive supervision and the resilience of supervised institutions, particularly UBS, to mitigate systemic risks. Finma aims to improve its communication and efficiency while maintaining rigorous oversight of market, credit, liquidity, and actuarial risks. Additionally, the Federal Council plans to review Finma's supervisory instruments in early 2025, considering the upcoming PUK report on banking stability.
The Federal Council has endorsed FINMA's strategic objectives for 2025-2028, focusing on enhancing preventive supervision and the resilience of supervised institutions, particularly UBS, to address systemic risks. Continuous review and development of UBS's supervisory framework will be prioritized, alongside improving communication and operational efficiency within the authority. Additionally, the Federal Council plans to assess FINMA's supervisory instruments in early 2025, considering the upcoming PUK report on the CS emergency merger.
FINMA President Marlene Amstad acknowledged the authority's limitations in addressing the Credit Suisse crisis, emphasizing that the bank was privately owned and its board was responsible for its strategy. She called for a new legal framework to enhance accountability for bank managers and expressed readiness for restructuring if the UBS merger had not occurred, highlighting the need for better tools to manage financial risks.
In a recent podcast, FINMA President Marlene Amstad addressed concerns over the regulatory response to the collapse of Credit Suisse and outlined strategies to prevent UBS from facing a similar fate. She emphasized the need to minimize risks to the country and its citizens while ensuring the bank remains operational.
Credit Suisse AT1 bondholders are facing a prolonged wait for a decision on their claims, with a ruling on the legality of the CHF 80 million damages lawsuit against Switzerland not expected until February 2025. The case stems from the Swiss Financial Market Supervisory Authority's controversial write-off of the bonds after the bank's collapse. Legal representation for Switzerland is led by prominent litigator William Savitt in a New York Federal Court.
Marlene Amstad
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