Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Credit Suisse could face disciplinary action, Swiss regulator says

Published 03/26/2023, 09:16 AM
Updated 03/26/2023, 03:56 PM
© Reuters. FILE PHOTO: The logo of Swiss bank Credit Suisse is seen in front of a branch office in Bern, Switzerland November 29, 2022. REUTERS/Arnd Wiegmann/File Photo

© Reuters. FILE PHOTO: The logo of Swiss bank Credit Suisse is seen in front of a branch office in Bern, Switzerland November 29, 2022. REUTERS/Arnd Wiegmann/File Photo

ZURICH (Reuters) - Swiss financial regulator FINMA said it was considering whether to take disciplinary action against Credit Suisse managers after Switzerland's second largest bank had to be rescued last week by UBS.

FINMA President Marlene Amstad told Swiss newspaper NZZ am Sonntag it was "still open" whether new proceedings would be started, but the regulator's main focus was on "the transitional phase of integration" and "preserving financial stability".

UBS agreed to buy Credit Suisse for 3 billion Swiss francs ($3.26 billion) in stock a week ago and to assume up to 5 billion francs in losses in a merger engineered by Swiss authorities during a period of market turmoil in global banking.

Credit Suisse on Sunday declined to comment on the FINMA President's comments when asked by Reuters for a response.

Asked whether FINMA is looking into holding current Credit Suisse managers accountable for the collapse of Switzerland's second-largest bank, Amstad said it is "exploring the options".

"CS had a cultural problem that translated into a lack of responsibilities," Amstad was quoted as saying by NZZ, adding: "Numerous mistakes were made over several years".

FINMA had conducted six public "enforcement proceedings" against Credit Suisse in recent years, Amstad said.

"We have intervened and used our strongest instruments," she said of its previous moves.

Amstad also defended Switzerland's decision to write down 16 billion Swiss francs of Credit Suisse Additional Tier 1 (AT1) debt, to zero as part of the forced rescue merger.

"The AT1 instruments contractually provide that they will be fully written off in the event of a trigger event, in particular the granting of extraordinary government support," Amstad said.

"The bonds were created precisely for such situations."

In a separate interview with Swiss newspaper SonntagsZeitung, FINMA's CEO Urban Angehrn defended its role in dealing with Credit Suisse prior to the takeover.

"We intervened consistently in these cases, used our instruments, and they had an effect," he said. "We do not run the bank, that responsibility lies with the board of directors and the management of the bank."

Angehrn also said there are open discussions about widening FINMA's competencies, such as its ability to issue fines, which despite having "sharp instruments" it currently does not have.

© Reuters. FILE PHOTO: Chair of the Board of Swiss Financial Market Supervisory Authority (FINMA), Marlene Amstad attends a news conference on Credit Suisse after UBS takeover offer, in Bern, Switzerland, March 19, 2023. REUTERS/Denis Balibouse

"We do not have a "senior managers regime", which could help with the issue of manager responsibility, and FINMA is limited in communicating cases."

($1 = 0.9199 Swiss francs)

Latest comments

they won't.
FINMA itself should be taken into scrutiny first and foremost for letting all this sh happen on their watch.
I think in the bigger scheme of things a slap on the wrist is insignificant. The USD is about to collapse.
f these regulators and f these banks. U shoukd all fail miserably
Credit Swiss was netorius for phantom shotring
Since Joe Biden has become president the world has fallen apart.
Kinky
Next up?
Deutsche Bank
banknifty up 650 point monday morning session
Good... Managed by profesional West brilliant team
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.