Banks Parliamentary commission calls for lessons to be learned from emergency merger of CS and UBS
No systemically important bank in Switzerland should have to be wound up. The commission of inquiry appointed by Parliament is therefore calling for lessons to be learned from the CS bailout. It is calling for measures in the law, but also in terms of cooperation between the authorities.
20.12.2024, 10:30
20.12.2024, 12:32
SDA
In the opinion of the parliamentary commission of inquiry (PUK), this crisis was caused by the management of Credit Suisse (CS). It credits the authorities with having prevented a global financial crisis by intervening in March 2023. The use of emergency law in the rescue operation was lawful.
Over 500 pages
On Friday, the PUK presented its 500-page report to the media in Bern. It was adopted unanimously. The PUK investigated the last ten years of CS, i.e. the period from 2015 until the completion of the merger with UBS in June 2023.
In its paper, the PUK calls for internationally oriented "too big to fail" regulation (TBTF), among other things. The Federal Council and Parliament had placed too much importance on the concerns of systemically important banks when it came to the implementation of international standards, particularly from 2015 onwards.
Too hesitant with the PLB
The Federal Council was too hesitant when introducing the Public Liquidity Backstop (PLB), the PUK writes. It also criticizes the capital requirements for systemically important banks. And it insists on clearer regulations for cooperation between the authorities responsible for financial stability.
The Financial Market Supervisory Authority FINMA did carry out intensive supervisory activities, as the PUK found. However, this had only had a limited effect. Despite numerous enforcement proceedings and corresponding warnings from FINMA, one scandal followed another at CS.
The PUK attests that the authorities prevented a global financial crisis with their intervention at CS. However, cooperation between the authorities did not always function optimally. The commission is calling for improvements in the exchange of information, risk management and early crisis detection.
Drawing lessons from the management of the CS crisis is imperative, writes the PUK. With UBS, Switzerland now only has one globally systemically important bank. And in comparison to its gross domestic product, it is "many times larger" than other financial institutions in its home countries.
Criticism of Ueli Maurer
The PUK is critical of the conduct of Finance Minister Ueli Maurer, who resigned at the end of 2022. It is incomprehensible that Maurer only informed the entire Federal Council verbally and refrained from providing written documents, it writes.
Maurer only shared little information with the full Federal Council. In the opinion of the PUK, he therefore did not fully comply with his statutory duty to provide information. When handing over his department to the current Finance Minister Karin Keller-Sutter, he did not inform his successor sufficiently about the CS dossier.
The PUK's work focused on the Federal Council and the Federal Department of Finance (FDF), FINMA, the SNB and the Federal Audit Oversight Authority. 79 people were questioned in writing or orally, including all current and former members of the Federal Council.
