jeu, Juin 13th 2024
Swiss financial watchdog Finma initiates bankruptcy against Geneva’s Flowbank due to insufficient capital and debt, aiming to safeguard depositors.
The Swiss Financial Market Supervisory Authority Finma opened bankruptcy proceedings against Geneva-based Flowbank today, Thursday, according to a statement from the authority. The reason for this is that the bank no longer has the minimum capital required for its business operations.
In the statement, FINMA also expresses concern that the bank has a great deal of debt. The bankruptcy serves to protect depositors. “According to current calculations, the privileged deposits can be repaid in full from the bank’s available funds,” it continues.
As a first step, the bankruptcy liquidator, the law firm Walder Wyss, will quickly repay the client assets of up to CHF 100,000 to the affected clients. In addition, the clients’ securities accounts will be segregated and refunded.
Last week, Finma reportedly determined that the Geneva-based bank no longer had sufficient capital for its business activities as a bank. Flowbank and its governing bodies were not in a position to take sustainable measures within the required timeframe to comply with the capital adequacy requirements again.
According to the press release, this is not the first time the bank has been targeted by the authority. Finma opened its first enforcement proceedings against the bank back in October 2021. Another followed last year.
The investigator appointed in 2023 found that Flowbank had repeatedly failed to comply with capital adequacy requirements and was still poorly organized in various areas. The bank’s accounting and financial reporting proved to be incorrect and incomplete. In addition, disclosure and reporting obligations to Finma were violated.
©Keystone/SDA
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