Credit Suisse’s years of mismanagement were at the root of its downfall in March 2023, the parliamentary commission of inquiry concluded. The federal authorities were not at fault, but accumulated shortcomings at all levels, writes Swissinfo.
The difficulties encountered by Switzerland’s second-largest bank can be attributed to the Board of Directors and management of Credit Suisse (CS). They were reluctant to accept the numerous interventions of the Swiss Financial Market Supervisory Authority (FINMA).
In its unanimously adopted report, the parliamentary commission found no wrongdoing on the part of the federal authorities. However, it believes that certain decisions took too long. In its view, it is imperative to learn the lessons from the management of the crisis.
It identified improvements to be made at both the implementation and legislative levels. It has formulated twenty recommendations and tabled several interventions.
According to the report, the governing Federal Council and Parliament placed too much emphasis on the requirements of systemic banks within the framework of the too-big-to-fail (TBTF) regulation. Deadlines were extended and adaptations to international standards delayed. The Federal Council showed itself to be too hesitant, particularly when it came to introducing a public liquidity guarantee mechanism.
In the commission’s view, too-big-to-fail legislation is too focused on Switzerland, especially where emergency plans are concerned. The liquidation or reorganization plan of a systemically important bank operating internationally from Switzerland must imperatively take into account the international overlap. Relief from capital and liquidity requirements must be limited. Current auditing supervision regulations must be reviewed.