Swiss regulator mulls further action over Credit Suisse

Swiss regulator the Financial Market Supervisory Authority (Finma) has not ruled out further disciplinary action against Credit Suisse, or its executives, after the bank was sold to rival UBS to restore financial stability to markets last week, according to local reports.

Swiss newspaper NZZ am Sonntag reported that Finma president Marlene Amstad said the regulator is “still open” to potential disciplinary action and is “exploring the options” over who to hold responsible for circumstances that led to Credit Suisse’s forced sale to UBS, which saw the state write-down $17bn of debt.

NZZ quoted Amstad as saying: “Credit Suisse had a cultural problem that translated into a lack of responsibilities… Numerous mistakes were made over several years.”

Speaking to SonntagsZeitung at the weekend, CEO of Finma Urban Angehrn, said: “We do not run the bank – that responsibility lies with the board of directors and the management of the bank.” He added that Switzerland does not have a senior managers regime in place.

Finma has enforced several proceedings against Credit Suisse in recent years.

Earlier this month, before the sale to UBS, Credit Suisse disclosed that ineffective risk management had caused “material weaknesses” in its internal financial reporting controls. Also this month, Finma ordered Credit Suisse to carry out remedial measures after it found the bank had “seriously breached” its supervisory risk management obligations over business relationships with financier Lex Greensill and his companies.

Speaking to local press, Amstad said Finma’s main focus was on the transitional phase of integrating Credit Suisse into UBS and preserving financial stability.

Addressing criticism of the write-down of Credit Suisse’s additional tier 1 bonds (AT1), Amstad said the move was contractual after the state stepped in with a $54bn lifeline from the Swiss National Bank. This was followed up just days later with a rescue offer brokered by the Swiss government and Finma that saw UBS acquire Credit Suisse for a cut price $3.2bn.

“The AT1 instruments contractually provide that they will be fully written off in the event of a trigger event, in particular the granting of extraordinary government support,” Amstad told NZZ.