FINMA report exposes regulatory loopholes at Credit Suisse
In a recent report, the Swiss Financial Market Supervisory Authority disclosed a major oversight of Credit Suisse's bank supervision, pointing to its failures in risk management, corporate governance and risk culture。
In a recent report, the Swiss Financial Market Supervisory Authority (FINMA) disclosed a major oversight of Credit Suisse's supervision, citing failures in risk management, corporate governance and risk culture.。
The report highlights the efforts of the regulator, together with the government and the Swiss National Bank, to safeguard the solvency of banks, while drawing attention to the shortcomings of the measures implemented.。
Misaligned execution: A critique of Credit Suisse's de-risking strategy
Despite years of implementing "far-reaching intrusive measures," regulators' warnings, particularly since the summer of 2022, have gone unheeded, the report said.。The Financial Industry Regulatory Authority (FINMA) has stressed the need for a stronger legal basis, advocating for the adoption of tools such as the senior manager system, the right to fine, and stricter corporate governance rules.。
Credit Suisse announced strategic changes to reduce risk, including downsizing the investment bank and focusing on asset management, but has been criticized for inconsistent execution.。The report notes that repeated scandals have damaged the bank's reputation and that floating pay remains high even during periods of financial losses.。
The Financial Industry Regulatory Authority conducted 43 preliminary investigations, nine reprimands, 16 criminal charges and initiated 11 enforcement proceedings against the bank and three individuals.。Regulators have repeatedly informed Credit Suisse of the risks, recommended improvements and introduced a large number of measures, including capital and liquidity measures and governance and compensation interventions.。
Despite 108 on-site regulatory reviews between 2018 and 2022, documenting 382 points requiring action, the report shows FINMA's options and legal powers have been exhausted.。Credit Suisse blames loss of confidence on market panic triggered by US Silicon Valley bank collapse。
In response to the findings, the Swiss Financial Industry Supervisory Authority called for a wider range of regulatory options, including the implementation of a senior management system, the granting of fines and the regular publication of enforcement procedures.。The report concludes that effective intervention in the pay system requires a stronger legal mandate。
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