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Swiss financial supervision demands more power over banks


Banks are repeatedly targeted by the Swiss financial market supervisory authority. Its president believes that new instruments and more extensive powers against financial institutions are necessary.

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Finma was targeting: Bank Credit Suisse

Photo: Arnd Wiegmann / REUTERS

The Swiss Financial Market Authority (Finma) is calling for more power to take action against misconduct by bankers.

The authority would welcome new instruments to hold managers accountable for mistakes, said Finma President Marlene Amstad, the Sunday newspaper.

Finma cannot introduce such instruments on its own, "the legislature has to do that." However, there are political advances that address such a need for action.

Most recently, headlines around Credit Suisse ensured that politicians in Switzerland were increasingly discussing penalties for bankers.

The Swiss bank was targeted by the supervisory authorities for alleged involvement in a bribery plot and had to pay a fine of millions.

In addition, Finma had tackled Credit Suisse because of the collapse of the US hedge fund Archegos Capital and the emergency liquidation of four funds operated jointly with the now insolvent Greensill Bank.

The collapse of the hedge fund cost the bank five billion francs.

Amstad emphasized that Finma is interested in having as complete an instrument case as possible and is fundamentally open to new, effective instruments.

She also sees higher risks in the mortgage market, as rising prices are increasingly decoupled from fundamentals such as wage developments.

"But whether the banks have to maintain the countercyclical capital buffer is not our decision, but ultimately that of the Federal Council."

The government had suspended these capital buffers because of the pandemic.

"What we can do is demand risk surcharges from individual banks if a bank takes too great risks when granting mortgages," said the Finma president.

This instrument is used regularly.

kig / Reuters

Source: spiegel

All business articles on 2021-12-05

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