Switzerland is accelerating reform of banking regulation by giving regulators more powers, a year after the collapse of Credit Suisse. writes about this Bloomberg .
The government is preparing to introduce legislative proposals to improve all key aspects of bank supervision, from capital and liquidity rules to corporate governance.
Particular attention will be paid to UBS, the country’s only remaining global systemic bank, which is now more than twice the size of the Swiss economy. A key element of the reform will be to strengthen the position of regulator Finma, which has failed to curb years of mismanagement at Credit Suisse.
Finma’s new CEO, Stefan Walter, who has experience in European banking supervision and worked at the ECB for a decade, should help solve this problem. As experts note, Finma definitely needs more resources to control the big banks.
It is planned to give Finma the right to impose penalties on banks, as well as introduce a personal liability regime for senior management. Such systems operate in various jurisdictions, including the UK and Hong Kong, allowing regulators to identify those responsible for abuse.
“Swiss regulations have always been, and are likely to remain, based on principles rather than rigid rules. But specific provisions are needed for an effective management liability regime,” said Thomas Hirschi, Finma’s head of banking supervision.
The aim of the reforms is to change the risk management culture in Swiss banks. The need for this was highlighted by last year’s scandal at Julius Baer, which allowed excessive concentration of risk on a single customer, the publication writes.
Given its systemic importance, UBS is likely to be subject to more stringent capital and liquidity requirements. It is possible to introduce additional “Swiss regulation” (an additional level of financial protection required by Swiss banking regulators – socialbites.ca) above global standards, which could cause criticism from banks.
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Source: Gazeta
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