2023-12-19 12:57:49
Finma, the financial markets watchdog, denounced in a report on Tuesday the “repeated scandals” and “errors” of management by Credit Suisse which caused it to lose customer confidence and led to its collapse last March. The regulator is calling for better tools to act more effectively.
The Federal Financial Market Supervisory Authority (Finma) heavily attacked Credit Suisse managers in its report on the establishment’s crisis.
The board of directors, then chaired by Axel Lehmann, had opted on several occasions for changes in strategy, the last dating back to October 2022 and providing for a “radical restructuring” of its investment bank and a reduction in costs.
“These changes in strategy were not implemented rigorously. Income volatility remained high in both investment banking and wealth management,” Finma experts estimated. Added to this are “severe shortcomings” in risk management.
Capital hemorrhage
The regulator also noted “the repeated scandals (which) have tarnished the bank’s reputation, weighed on results and generated a loss of confidence”. At the height of the crisis, Credit Suisse had in fact suffered a hemorrhage of capital with outflows of 110.5 billion francs in the last quarter of 2022. The reorganization, charges and fines have in turn weakened the level of own funds of the establishment.
Entangled in repeated cases for several years, Credit Suisse saw its situation deteriorate rapidly in early 2023, following the bankruptcy of several regional American banks in mid-March. As part of the rescue plan unveiled on March 19 by the Swiss authorities, UBS then agreed to take over its former rival for 3 billion francs, following having obtained significant financial guarantees from the Confederation and the National Bank. Swiss.
>> Michael Maccabez’s explanations in the 12:45 p.m.:
FINMA has published its report on the bankruptcy of Credit Suisse. Details from journalist Michael Maccabez / 12:45 p.m. / 1 min. / today at 12:45
Finma calls for new instruments to act better
Involved in the rescue of Credit Suisse, Finma estimated that “the authorities’ crisis measures have achieved their objective”, but that the legal basis for supervision of the banking sector “has reached its limits”.
“We operate within a very tight framework,” declared Finma President Marlene Amstad at a press conference in Bern, warning however that “there is no all-risk insurance” for banks. .
For Birgit Rutishauser, interim general director, “the toolbox (of Finma) is not big enough and it needs to be supplemented.” Without this, “the risk of a new collapse (of a financial institution) cannot be reduced,” she added.
Faced with this observation, the financial markets policeman would like to strengthen its repressive arsenal, including the introduction of a special regime for management and the board of directors (“senior managers regime”), the capacity to impose fines and the possibility of communicating regularly on in-depth investigations.
The granting of these measures is currently the subject of a legislative process, indicated Marlene Amstad.
Apart from these instruments of coercion, the financial markets watchdog also wants new measures in terms of capital and additional stress tests to assess the liquidity levels of banks.
>> Review the 7:30 p.m. topic on the role of Finma:
After the takeover of Credit Suisse by UBS, FINMA is called upon to play an important role in the supervision of systemic banks / 7:30 p.m. / 1 min. / September 1, 2023
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