Bankers Association wants additional regulation after CS crisis
Published: Tuesday, Mar 12th 2024, 13:40
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In the wake of the CS crisis, the Swiss Bankers Association (SBA) wants to supplement existing banking regulation with "targeted" measures. For example, the industry association is in favor of greater accountability for bank managers. However, it rejects the financial market supervisory authority Finma's authority to impose fines as well as stricter regulations on equity capital.
Overall, the Swiss financial center has proven its stability over the past year, the SBA executives said at the association's annual media conference on Tuesday. With the CS takeover by UBS and the measures taken by the authorities, Switzerland had "averted the risk of an international financial crisis on its own".
Learning lessons
The political process is still underway, but it is important to draw the "right lessons" from the CS crisis, SBA President Marcel Rohner told the media. The association clearly supports the introduction of a responsibility regime ("senior manager regime"): This would require banks to clearly name the individuals responsible for certain business and risk-taking in future.
At the same time, the SBA signaled its clear rejection of Finma's request to be able to impose fines on banks that have committed misconduct in future. Rohner sees this as a "mixture of supervisory law and criminal law". He also argued that the high fines abroad had not been effective in the CS case in particular: "There was no bank that was fined more than Credit Suisse."
The association is open to Finma's demands for greater transparency: such "naming" could certainly have an effect, Rohner conceded. The association also wants to lend a hand with a statutory anchoring of the remuneration policy for top managers.
Liquidity for all banks
According to the association, the supply of liquidity by the Swiss National Bank (SNB) should be expanded: all banks should be able to obtain liquidity quickly from the SNB against collateral if they are no longer able to refinance themselves on the market. The collateral deposited should also include mortgages or corporate loans, for example. For the SBA Chairman, this is also a lesson from the CS crisis: "Deposits were withdrawn at a speed that we have never seen before."
The association also supports the introduction of the "Public Liquidity Backstop" (PLB). The federal government's default guarantee to the SNB is intended to provide the necessary liquidity for the restructuring of systemically important banks. The PLB was introduced by emergency ordinance during the CS crisis.
In contrast, the industry association clearly rejects demands for higher capital requirements for systemically important banks. "Capital was not the problem in the CS crisis," emphasized Rohner.
Solid 2024 expected
Overall, the SBA sees the Swiss banking center in good shape. The majority of Swiss banks presented strong annual results for the past year, not least thanks to increased income from the interest business.
According to the banking association's industry forecast, Swiss banks can expect a "solid" performance in the current year 2024, despite the rather sluggish economy in Switzerland. Although a decline in the interest business is expected, this should be offset by a stronger commission and services business.
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