Director: Financial market supervision needs a clearer legal basis
Published: Thursday, Sep 5th 2024, 22:20
Updated At: Friday, Sep 6th 2024, 01:59
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Finma Director Stefan Walter has once again spoken out in favor of improving the legal framework for financial market supervision. The authority probably also needs more money, he said in a speech.
In order to be able to intervene early in the event of problems in the financial sector, Finma needs, among other things, "new instruments, a clearer legal basis and probably also more resources", he said at the Finanz & Wirtschaft Forum on Thursday.
Based on typical signs, Finma can identify problems in the risk culture, management and business models of banks at an early stage. However, it is then necessary to act quickly and react appropriately in order to rectify the problems. "Earlier intervention is always more efficient than later intervention, which would probably have to be much deeper and more painful," says Walter.
At present, however, the framework conditions for early intervention by the financial market supervisory authority are still too weak. "In the event of a complaint procedure, FINMA must be able to invoke clearly formulated intervention options; there must not just be a general article, as is currently the case with Article 31 of the Financial Market Supervision Act, according to which FINMA ensures that orderly conditions are restored," he said.
Suspensive effect of complaints
For example, financial institutions could use the suspensive effect to block the early intervention of FINMA for years. This is even the case in serious cases where the protection of creditors, market participants, consumers or even the financial system is at stake, according to the Finma Director. "From Finma's point of view, it would of course be best if appeals had no suspensive effect for predetermined groups of cases," he continued.
According to Walter, Finma as a regulatory authority must be granted "important powers such as the ability to systematically restrict distributions and remuneration if forward-looking stress tests reveal a capital shortfall".
In his speech, he also emphasized the importance of effective, independent financial market supervision. Together with an independent monetary policy aimed at price stability and a conservative fiscal policy, it is "essential for Switzerland's prosperity".
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