Decision on Swiss management of Credit Suisse meltdown to set tone for UBS By Reuters
Written by Ariane Luthi and Oliver Hirt
ZURICH (Reuters) – A much-anticipated report on how Swiss authorities handled the collapse of Credit Suisse will be published in the coming days, which could pave the way for tougher scrutiny of its new owner UBS.
Credit Suisse, once a mainstay of the financial institution and Switzerland’s second-largest bank, was exposed in a series of scandals that culminated in the rescue promoted by its biggest rival UBS in March 2023.
The Swiss parliament formed a committee in June last year to formally investigate the death of the 167-year-old bank.
The government wants its findings to be the focus of new laws aimed at preventing a repeat of the crisis, Swiss officials have accused Credit Suisse executives.
Central to the government’s proposals set out in April is a proposal for UBS and other systemically important banks to have more capital. UBS has warned of this, with continued uncertainty clouding its outlook.
The Swiss newspaper SonntagsBlick said the parliamentary committee will not make recommendations on the bank’s currency.
The report itself is unlikely to have a direct impact on UBS, said Vontobel Bank analyst Andreas Venditti, but the findings could shape the situation in Switzerland.
“Depending on what topics come out of it, that can influence public opinion which can influence political opinion,” Venditti said.
The parliamentary committee, known as PUK, has been highly secretive, and the few leaks that have emerged have drawn criticism from the authorities, especially the market regulator FINMA. This is broadly consistent with the intent of the indications provided to Reuters by law enforcement and officials.
Media reports over the weekend suggested the report would say FINMA could have done more to strengthen Credit Suisse’s management as its problems deepened. FINMA said it must have greater powers and the government encouraged it to be strengthened.
PUK, which promised to publish its report by the end of 2024, has not said when exactly. A PUK spokesperson said last week that it has yet to appear this year.
The Swiss National Bank (SNB) and its former chairman Thomas Jordan are also likely to be criticized for doing too little of late, media reports say.
Reuters reported last year that Jordan had supported the creation of a national bank, before the privatization plan was withdrawn amid opposition from FINMA and Credit Suisse. Critics say he could have done more to publicly commit to saving the bank.
The Swiss Ministry of Finance and the SNB declined to comment.
FINMA said it had used its tools extensively to deal with Credit Suisse over the years but was ill-equipped to intervene compared to international peers.
“If Switzerland wants to be effectively monitored, it needs new tools and early intervention capabilities,” its statement said.
