Switzerland’s financial regulator FINMA wants to be able to name and blame banks that break its rules, Chief Executive Officer Stefan Walter told newspaper NZZ in an interview published Tuesday.
The request is part of FINMA’s demands to increase its powers, after the authority was criticized for its handling of the Credit Suisse bankruptcy last year.
“Today, the publication of enforcement proceedings is the exception,” Walter told the newspaper. “In the future, non-communication should be the exception.
Mr. Walter, who took office in April, said pointing the finger at financial institutions would have a disciplinary effect if companies knew the sanctions would be made public.
“This would also show the results of supervision,” he added. “The dilemma for any supervisory authority is this: if something goes wrong, everyone knows it. If something is avoided, no one knows.”
Banks need to be more open and provide complete information, he said. If there is a lack of cooperation, the regulator could carry out more on-site inspections.
“In extreme cases, you must have the ability to hold individuals accountable and, if necessary, remove them from office,” he added.
This requires what is called a senior management regime, in which responsibility is assigned to individuals, making it easier to determine who is at fault.
In April, the Swiss government made 22 recommendations aimed at improving regulation of the country’s financial sector, including stricter capital requirements.
Switzerland’s largest bank, UBS, which took over Credit Suisse (CS) after the latter’s collapse, has already raised concerns about potential regulatory changes, with its chairman Colm Kelleher saying the requirement to holding additional capital was not the “right solution”.
FINMA’s Walter said he did not want to start a “feud” with UBS management, but that sufficient capital was needed to reduce the risk and scale of a crisis. ‘future.
“Also important is the distribution of capital within the bank, which is crucial in the stabilization or resolution phase. The CS crisis showed this,” Walter told the newspaper.
“Capital requirements increase with the size of the bank. However, this does not solve the problem of capital distribution: we want the parent company to have a sufficient reserve so as not to become a bottleneck in the event of a crisis. (Reporting by John Revill; Writing by Susan Fenton)
