CS-PUK report: CS own funds facilitation in the media spotlight
Published: Friday, Dec 20th 2024, 19:00
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In their reporting on the CS PUK, many media outlets are focusing on the mismanagement of CS management, which the Commission has denounced. However, the capital relief granted to CS by FINMA in 2017 is also a major topic.
Tamedia: CS shamelessly exploited the weak state
The PUK report provides a clear picture. It shows how high-ranking managers ignored the fact that their actions caused enormous damage to Credit Suisse. And it also illustrates how weak institutions failed to prevent this. The then Federal Councillor Ueli Maurer and the former Finma leadership around Chairman Thomas Bauer and Mark Branson became part of the problem instead of the solution. Under their leadership, CS was granted a discount on its capital cushion in 2017. From then on, it seemed safer than it actually was. In retrospect, this was disastrous.
NZZ: Without filter, CS would have had to raise an additional 10 billion in capital
When Credit Suisse was required to hold more equity due to new accounting regulations, Finma granted it generous exemptions. The "regulatory filter" allowed CS to gloss over its capital situation. Without this filter, CS would have had to raise well over CHF 10 billion in additional capital. If the bank had not succeeded in doing so, its capitalization would have fallen - and shareholders, clients and the public would have realized just how bad CS's financial situation was. But Finma, of all people, prevented this. In its report, the PUK states soberly: "The filter allowed CS AG to maintain the appearance of sufficient capitalization until the end." The extent to which political pressure from Ueli Maurer's Finance Department played a role in granting the filter is still unclear.
Luzerner Zeitung: See nothing, hear nothing, say nothing
The Financial Market Authority demanded better staff for the CS Board of Directors, but was then fobbed off with negative answers. The National Bank did not want to take a closer look either, after all it did not want to be dragged into the mess. The entire Federal Council showed little interest in the looming CS debacle. Former Finance Minister Ueli Maurer informed his colleagues very rarely and only verbally and "summarily". But the others could have asked questions. By the dramatic October 2022 at the latest, it was clear to every newspaper reader that things were going badly for the traditional Swiss bank. When Maurer canceled the CS Federal Council meeting promised for November 4, this was obviously fine with the rest of the board. See nothing, hear nothing, say nothing.
Finance and economy: finally holding bank managers to account
Parliament is taking the players involved in the fall of Credit Suisse to court - but not itself. But even if the too-big-to-fail problem cannot be regulated away, a much-needed discussion could now be sparked. With hindsight, everyone seems smarter. The Parliamentary Commission of Inquiry (PUK) has published its 500-page report on the downfall of Credit Suisse (CS) and is not sparing with its criticism - especially of the bank itself. Years of mismanagement led to this. There really was no need for a PUK to come to this conclusion; reading the newspapers over the past ten years would have been enough.
Handelszeitung: Switzerland needs more Finma, not less
The Parliamentary Commission of Inquiry PUK has presented a differentiated final report and refrained from simply bashing Finma. Yes, the supervisory authority made mistakes and was not consistent enough in enforcing its demands against Credit Suisse. But the PUK, like the Ministry of Finance before it, also came to the conclusion that the supervisory authority lacked the tools to really take action. And that is the much more important conclusion of this investigation. The Finma instruments must be supplemented, for example by ensuring that appeals against rulings can no longer have a suspensive effect. In addition, the principle of "naming and shaming" has proven to be extremely effective abroad. The Swiss supervisory authority should therefore also report on completed enforcement proceedings and name the perpetrators. Bank customers can then vote with their feet as to whether they want to leave their money with a bank that flouts the rules.
Finews: The PUK's missed opportunity
What remains of the report of the Parliamentary Commission of Inquiry (PCI) into Credit Suisse (CS)? According to the PUK, the management and the Board of Directors of the former major Swiss bank are responsible for the downfall of CS. The Financial Market Supervisory Authority (Finma) intervened, but was far too often unable to assert itself. The coordination between the authorities is unsatisfactory, the Federal Council lacks a system for the early detection of crises and the too-big-to-fail legislation proves to be unsuitable for such cases. But what does the report mean with regard to UBS? Anyone hoping for clear answers or indications from the PUK report was disappointed. In its 500-page report, the Commission remains extremely vague on this issue.
Financial Times: Swiss lawmakers criticize "years of mismanagement" at CS
Swiss lawmakers have blamed the collapse of Credit Suisse on "years of mismanagement" by its executives and criticized financial regulator Finma for granting the bank relief on capital requirements in the years leading up to its collapse. The landmark political inquiry, only the fifth in Switzerland's history, refrained from blaming regulators for the collapse of one of the country's biggest banks. However, it did criticize Finma for granting Credit Suisse relief on the amount of capital it was required to hold under a so-called regulatory filter, which effectively allowed the bank to inflate the value of its foreign subsidiaries.
Bloomberg: Swiss banking regulator failed at Credit Suisse
The Swiss parliament has sharply criticized the former leadership of financial regulator Finma in a landmark investigation into the collapse of Credit Suisse. Finma's decision in 2017 to grant Credit Suisse relief on capital requirements obscured the bank's true condition and prevented corrective measures from being taken in time, the commission said in its report published on Friday. The regulatory filter helped Credit Suisse to "maintain the appearance of sufficient capitalization until the very end", it said. Finma granted the regulatory filter under the then director Mark Branson.
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