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Switzerland’s financial regulator was found to be ineffective in dealing with the scandals at Credit Suisse, according to a parliamentary commission of inquiry. The probe, which lasted 18 months, looked into the collapse of the bank in March 2023, which was caused by executive mismanagement. The commission concluded that the long-term mismanagement of Credit Suisse was the main cause of the crisis, and that the board of directors and management were responsible for the loss of confidence in the bank.
The investigation found no evidence of misconduct on the part of the authorities, but did criticize the Financial Market Supervisory Authority (FINMA) for its “partial ineffectiveness” in supervising the bank. The commission also questioned FINMA’s decision to grant “vast capital relief” to Credit Suisse in 2017, which allowed the bank to meet regulatory requirements in the following years. However, the report stated that the actions of the Swiss government, central bank, and FINMA in orchestrating the emergency merger with UBS prevented a global financial crisis.
The commission’s findings raise concerns about the effectiveness of Switzerland’s financial regulation and the role of FINMA in preventing such crises. The report also highlights the need for stricter oversight of executive management and their remuneration, as well as the importance of timely intervention by regulators.
The emergency merger of Credit Suisse into UBS also sparked debate in Switzerland about the size and dominance of the resulting bank in the Swiss economy. The inquiry was set up to investigate the role of Swiss authorities in the merger and to address concerns about job losses and competition.
Overall, the report sheds light on the failures of Credit Suisse’s management and the shortcomings of Swiss financial regulation. It also serves as a reminder of the potential consequences of executive mismanagement in the banking sector and the importance of effective oversight by regulators.