The regulator also wants more options to issue fines to banks that break the rules. It would also be helpful if Finma could stop bonuses for managers. “Finma supports broader possibilities to have a greater influence on the policy of supervised institutions.” FINMA said good governance laws for banks should become more stringent.
Credit Suisse threatened to collapse earlier this year after many customers withdrew their deposits due to concerns about the bank’s health. At the insistence of the Swiss government, rival UBS took over the bank to prevent the bankruptcy of Credit Suisse from causing a financial crisis.
Not on time
Superintendent Finma was criticized for not intervening in time. But Thomas Hirschi, head of the organization’s crisis department, said FINMA “used all available tools and identified the risk of destabilizing Credit Suisse early on.”
FINMA wrote in its report on the debacle surrounding Credit Suisse that the bank was in danger of collapse months before its final rescue by UBS in March. For example, at the end of 2022, Switzerland’s second-largest bank was about to request 50 billion Swiss francs (53 billion euros) in emergency financing from the country’s central bank.
Require action
Between 2018 and 2022, the regulator found more than 380 vulnerabilities at the bank that “required action.” Of these cases, 113 were very serious.
The regulator also wrote in the report that Credit Suisse did not want to implement the interventions imposed by Finma. Bank employees also repeatedly provided false information, resulting in sixteen charges, according to the supervisor. Partly because of these problems in monitoring financial stability, Finma wants more enforcement options.
