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The Swiss parliament's inquiry into Credit Suisse's collapse criticized the financial regulator Finma for granting inappropriate capital relief, which masked the bank's true financial state. The report highlighted years of mismanagement at Credit Suisse and called for enhanced regulatory powers for Finma, including the ability to impose fines on banks and their executives. It also urged the government to reform the bonus system and improve crisis response measures, paving the way for new financial legislation in Switzerland.
The Swiss parliament criticized the leadership of the financial regulator Finma for its role in the collapse of Credit Suisse, highlighting a 2017 decision that obscured the bank's true financial state. This regulatory filter allowed Credit Suisse to appear adequately capitalized until its demise in early 2023, despite ongoing scandals and client withdrawals. The inquiry report also noted that Finma failed to enforce accountability among Credit Suisse staff, despite identifying numerous deficiencies.
The Swiss parliament criticized the leadership of the financial regulator Finma for its role in the collapse of Credit Suisse, highlighting a 2017 decision that obscured the bank's true financial state. The inquiry found that Finma's regulatory filter allowed Credit Suisse to appear adequately capitalized until its demise, ultimately leading to an emergency takeover by UBS. Lawmakers are now advocating for stronger regulatory powers for Finma, including the ability to impose fines on banks and individuals.
Finma emphasizes the need for robust stabilization and liquidation plans for financial institutions, particularly UBS, to mitigate risks and ensure effective crisis management. The agency maintains that supervision is more stringent for larger banks, addressing concerns about unequal treatment. Additionally, it highlights the growing threats from non-financial risks, including cybersecurity and money laundering, and advocates for proactive intervention to enhance financial stability.
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) warns of increased uncertainty in the financial sector due to ongoing geopolitical conflicts, particularly highlighting risks from sanctions and cyber attacks. Legal and reputational risks for financial intermediaries have intensified, especially concerning sanctions on Russia. While interest rate risks have diminished, the potential for increased credit spreads remains a concern amid the volatile geopolitical landscape.
The Swiss financial sector faces significant uncertainty due to geopolitical conflicts, with Finma highlighting increased risks from sanctions and cyberattacks. Legal and reputational risks for banks have escalated, particularly concerning compliance with sanctions, while the authority emphasizes the need for robust cyber risk management among service providers. Although interest rate shocks are now deemed less likely, the potential for increased credit spreads remains a concern amid the volatile macroeconomic environment.
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.
The SEC's stance on the conversion of bail-in bonds into equity raises significant concerns about compliance with US securities law, complicating cross-border bank resolution efforts. Legal experts, including former SEC chair Jay Clayton, emphasize the need for clarity and guidance to navigate these regulatory challenges effectively. The ongoing discussions highlight the critical role of securities regulation in financial stability, especially in crisis situations.
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