By Dave Graham and Ariane Luthi
BERN (Reuters) – Swiss lawmakers called for stricter oversight of the financial sector after investigating the collapse of Credit Suisse, casting an unflattering light on authorities while pinning the blame on the bank’s implosion primarily on its managers.
In a long-awaited 569-page report published on Friday, lawmakers exposed Swiss bureaucracy that is unaccustomed to scrutiny, rebuking regulators for being secretive and mistrustful, and for responding at times haphazardly to the crisis that felled the bank in March 2023.
Arch rival UBS stepped in to buy Credit Suisse for a fraction of its value in a government-orchestrated rescue.
In June 2023, parliament took the unusual step of forming a committee to probe the official response to the Credit Suisse meltdown. Interviews with those involved were held privately.
The government has said it will use the findings to inform its plans for reform of the banking sector.
“The (committee) considers Credit Suisse’s years of mismanagement to be the cause of the crisis,” say the opening lines of a statement accompanying its report, translated from German.
The committee, known as PUK, chronicled in detail the chaotic final days of the bank, and criticized a lack of transparency during months of crisis meetings between finance ministry officials, the central bank, and the market regulator FINMA, urging them to keep written records in future.
“However, the PUK does not see any causal misconduct on the part of the authorities for the Credit Suisse crisis and finds that they prevented a global financial crisis,” it wrote.
The unravelling of 167-year-old Credit Suisse, a pillar of the financial establishment and the country’s second-biggest lender, left Switzerland with just one major international bank, which now holds a balance sheet bigger than the entire economy.
The government in April sketched out ‘too-big-to-fail’ plans to ensure UBS does not go the same way as Credit Suisse, centring chiefly on making the bank hold more capital. But it vowed not to give more specifics until after the PUK report.
The committee’s conclusions did not offer prescriptive advice on how the banking sector should be reformed, but the broad sweep of the 30 recommendations and requests directed at the government cleaved closely to those April proposals.
It pressed the government to strengthen FINMA and ensure “appropriate consideration” be given to the foreign units of systemically relevant banks such as UBS, which authorities have said could need bigger capital buffers to weather crises.
