Swiss regulator calls for more powers after Credit Suisse collapse

cnbc.com:

Switzerland's financial regulator on Tuesday called for greater legal powers and vowed to adapts its approach in the wake of the Credit Suisse collapse.

The 167-year-old bank was rescued by domestic rival UBS in March in a deal brokered by Swiss authorities, after a string of risk management failures and scandals triggered a client and investor exodus that forced it to the brink of insolvency.

The Swiss Financial Market Supervisory Authority (FINMA) said in a Tuesday report that, alongside the government and the Swiss National Bank, it had achieved the aim of safeguarding Credit Suisse's solvency and ensuring financial stability.

It also drew attention to the «far-reaching and invasive measures» taken over the preceding years to supervise the bank and to «rectify the deficiencies, particularly in the bank's corporate governance and in its risk management and risk culture.»

From summer 2022 onwards, FINMA also told the bank to take «various measures to prepare for an emergency» — a warning it suggests went unheeded.

«FINMA draws a number of lessons in its report. On the one hand, it calls for a stronger legal basis, specifically instruments such as the Senior Managers Regime, the power to impose fines, and more stringent rules regarding corporate governance,» the regulator said.

«On the other hand, FINMA will also adapt its supervisory approach in certain areas, and will step up its review of whether stabilisation measures are ready to implement.»

FINMA said that strategic changes announced to de-risk Credit Suisse, such as downsizing its investment bank, focusing on its asset management business and reducing its earnings volatility, were «not implemented consistently,» while «recurrent scandals undermined the bank's