UBS chief government Sergio Ermotti has referred to as for better powers for Switzerland’s monetary regulator and sanctions for negligent bankers within the wake of Credit score Suisse’s collapse.
In a uncommon present of assist from a senior banker for more durable laws, the top of UBS — which rescued its former rival in March in essentially the most vital financial institution takeover because the monetary disaster — stated Switzerland ought to improve private accountability in its banking sector.
“It must be simpler for the financial institution, or the regulator, to go after individuals who demonstrated nice negligence of their duties,” stated Ermotti in a speech on the College of Zurich on Wednesday night time.
He added that whereas there was no want to vary Switzerland’s regulatory framework essentially, there was benefit in focused alterations to “handle the foundation causes of the Credit score Suisse collapse”.
These embrace strengthening “the instruments for early intervention by supervisors based mostly on an goal set of indicators whereas additionally counting on a robust authorized foundation for such actions”, Ermotti stated.
The UBS chief was endorsing a package of reforms to Switzerland’s banking guidelines offered by a government-appointed panel of monetary specialists in September.
Among the many most important findings of the group, which was tasked with analysing the near-collapse of Credit score Suisse, was that the nation’s markets regulator Finma was too weak to deal with banking crises adequately.
Within the first official, public evaluation of the disaster, it discovered that Finma lacked tooth in contrast with worldwide friends and struggled to implement its will on the nation’s banking sector.
The long-running issues at Credit score Suisse got here to a head in March, when a collapse within the financial institution’s share value and exodus of consumer property prompted Swiss authorities to name on UBS to rescue its neighbour.
The autumn of Credit score Suisse — a 167-year-old establishment that financed Switzerland’s industrial revolution — led to recriminations throughout the nation, with a parliamentary inquiry into the collapse underneath means.
The financial institution’s demise adopted greater than a decade of scandals and losses, which Ermotti characterised on Wednesday as a “gradual, painful decline — and dramatic end” that was “embarrassing to the Swiss monetary centre and to the picture of Switzerland typically”.
In an appraisal of the failings at Credit score Suisse and the accountability of its administration workforce and board throughout the financial institution’s closing years, Ermotti stated: “Many key stakeholders uncared for the warning indicators — or worse, ignored them.”
He added: “[Credit Suisse] had repeated threat administration and operational failures which undermined the credibility of its management and the board.
“This ineffective governance in flip led to extreme turnover in key board and administration positions, additional undermining particular person accountability throughout the agency.”