The Swiss Financial Market Supervisory Authority (FINMA) has released its report on the Credit Suisse crisis, calling for more sanctioning powers, stricter regulatory standards, and the ability to impose additional capital requirements.
In its report on the collapse of Credit Suisse in March 2023, FINMA assesses the events at the bank and the strategic errors that led to the crisis. The report also critically examines FINMA’s own role in the matter.
The report states that the legal framework for supervision reached its limits in this case. While FINMA utilized all available instruments to address the risk of potential destabilization of Credit Suisse, its actions were unable to compensate for the underlying causes of the loss of trust, such as deficiencies in the bank’s strategy implementation and risk management.
FINMA’s Chairwoman, Marlene Amstad, emphasized the need for enhanced supervisory powers, stating that the Credit Suisse case illustrates both the possibilities and limitations of supervision.
From an outcome perspective, FINMA considers its actions in March 2023 to have been effective and fulfilling its legal mandate. The measures taken protected creditors and ensured the functioning of financial markets.
Looking ahead, FINMA supports expanding its powers and measures. This includes exerting greater influence on governance, implementing a Senior Manager Regime, having the authority to impose fines, and the ability to regularly publish enforcement proceedings.
The legal obligation to grant relief in terms of capital requirements weakened the bank’s core business at the individual institution level. The regulatory treatment of holdings also had a pro-cyclical effect during the crisis. Therefore, as part of the review of too-big-to-fail requirements, FINMA calls for stricter regulatory standards at the individual institution level.
In addition, risks and resulting loss potential should be systematically analyzed in the future. If necessary, additional capital requirements should be imposed and disclosed.
Regarding recovery plans, FINMA will focus more on the effective implementability of measures and consider tightening approval practices. Furthermore, resolution planning will be designed to address faster bank runs and more crisis scenarios.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Marlene Amstad |
| Companies | Finma, Credit Suisse, Eidgenössische Finanzmarktaufsicht |
| Currencies | None |
| Securities | None |
