It asks to expand its powers to be able to impose sanctions on supervised entities
5 Apr. (EUROPE PRESS) –
The Swiss Financial Market Supervisory Authority (Finma) has explained that until the decision was made to rescue Credit Suisse through its acquisition by UBS, it had worked on four potential alternatives, including, in addition to the acquisition of the bank by another entity, the temporary nationalization, the resolution and an emergency plan for the bankruptcy of the institution.
“From the beginning, Finma pursued the goal of keeping as many options open as possible,” said Marlene Amstad, president of Finma’s board of directors, at a press conference.
In this way, he has clarified that four options were prepared until the decision was made, indicating the alternatives of “resolution, emergency plan with group bankruptcy, temporary public property and a takeover.”
“Specifically, this meant that on March 19, a draft resolution decree and a bankruptcy decree with the respective action plans were also ready for signature,” he indicated.
Regarding the definitively implemented action, facilitating the acquisition of Credit Suisse by its rival UBS, the person in charge of Finma has indicated that Switzerland has been the first country to deal with the practical application of legislation to address crises in banks too big to fail .
In this sense, he recalled that in the case of Credit Suisse many elements of the legislation were applied, while this entity has defended the exceptional circumstances of the crisis, for which reason the authorities “would have risked not stopping an imminent financial crisis using the resolution tool, but rather triggering such a financial crisis”.
“This would have had extremely damaging effects for Switzerland and its financial system. We would have risked throwing down the first domino,” he said.
Likewise, Amstad has wanted to defend the actions of the financial supervisor, recalling that in recent years Finma had made six proceedings against Credit Suisse public, adding that in the summer of 2020 it already required liquidity buffers from the entity that were higher than those required by law.
“It was only thanks to these precautionary additional liquidity buffers that Credit Suisse was able to survive the “banking panic” of October 2022, the Finma president has defended, noting that the bank recorded “historically unprecedented” outflows of client funds with a drop in deposits of 138,000 million Swiss francs (138,774 million euros) in the fourth quarter of 2022.
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On the other hand, the president of Finma has warned that the procedures opened these years with respect to Credit Suisse and the final disappearance of the entity raise fundamental questions about the “toolbox” available to the supervisor.
“As events surrounding Credit Suisse show, our instruments reach their limits in extreme cases. An extension is therefore worth considering,” Amstad said.
Specifically, it has warned that Finma does not have the power to impose fines, which makes it an exception compared to other major financial centers, nor does it have a senior management regime that makes it easier to clearly assign individual responsibilities to management bodies. .
