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UBS faces a challenging situation as it navigates shareholder expectations and Swiss government demands for increased capital to prepare for potential crises. The bank's recent moves, including a modest salary for its CEO and proposals to limit investment banking growth, reflect its attempt to balance these pressures while avoiding perceptions of blackmail. As the federal government sets the rules, UBS must engage in the political process to influence regulations that could impact its competitiveness.
The Swiss Financial Market Supervisory Authority (FINMA) faces criticism for its handling of the Credit Suisse (CS) crisis, with a parliamentary inquiry revealing that CS management largely bears the blame for its risky strategies and scandals. Politicians are calling for increased regulation and capital requirements for UBS, which has taken over CS, amid concerns that the bank's high executive salaries and bonuses could lead to similar failures. The debate highlights the tension between maintaining a competitive banking environment and ensuring adequate oversight to prevent future crises.
"Game Over," a film about the collapse of Credit Suisse, premiered in Zurich, showcasing the dramatic downfall of the bank and its executives. While the movie highlights the greed and mismanagement of CS leaders, it leaves unanswered questions about the lack of accountability and the role of Swiss authorities during the crisis. The film, financed by Netflix, combines thrilling historical insights with a critique of the banking sector, yet rushes through key events leading to CS's demise.
The Swiss National Assembly has approved measures to prevent a repeat of the Credit Suisse crisis, emphasizing enhanced powers for banking supervisors and limitations on executive bonuses. The Federal Council will draft revisions to the "Too big to fail" strategy by summer, aiming to strengthen the financial system amid ongoing concerns about potential future crises.
The Council of States has praised its own efforts following the Parliamentary Investigation Committee's report on Credit Suisse's downfall, yet little action is expected for years. The report attributes the crisis solely to Credit Suisse, avoiding accountability for regulatory failures, while UBS's stability remains uncertain. Politicians must now prepare for potential future banking crises and clarify the state's role in such scenarios.
The Council of States is set to debate the 500-page report from the Parliamentary Commission of Inquiry (PUK) regarding the Crédit Suisse crisis, which was triggered by the bank's management. The PUK criticized the Federal Council for its hesitant approach to the "too big to fail" regulations and called for reforms to strengthen financial oversight. UBS shares fell 3.6% to CHF 28.41 amid these discussions.
Credit Suisse's auditing history reveals significant failures, with KPMG and PwC certifying the bank's internal control system despite its eventual collapse. Under pressure from the SEC, PwC acknowledged the system's dysfunction in March 2023, raising questions about the oversight and competence of regulatory bodies. The lack of enforcement actions against the auditors from 2015 to 2023 highlights systemic issues in financial supervision.
The Council of States is set to address the regulation of UBS, following the emergency takeover of Credit Suisse. A proposed Public Liquidity Backstop (PLB) for systemically important banks has faced delays, with discussions on insurance premiums and capital adequacy requirements now expected to involve parliamentary decision-making, potentially subject to a public referendum. This shift may impact the urgency and effectiveness of reforms aimed at preventing future banking crises.
Ueli Maurer reflects on the downfall of Credit Suisse, emphasizing that the bank resisted state intervention despite severe liquidity issues. He critiques the limitations of FINMA and the Swiss National Bank, noting that a lack of legal frameworks hindered timely action, ultimately leading to a loss of trust in CS. Maurer argues that the state should not rescue mismanaged companies, highlighting the need for better oversight and intervention mechanisms in the banking sector.
Ueli Maurer, a veteran Swiss politician, reflects on the collapse of Credit Suisse following significant financial turmoil in late 2022. As former Finance Minister, he faces questions about his attention to the bank's decline and whether bold actions could have prevented its downfall. The discussion also touches on the future of Switzerland's financial sector.
Ueli Maurer
People
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