Could the end of Credit Suisse have been prevented? The Swiss Financial Market Supervisory Authority (Finma) is currently the focus of this discussion. CS had repeatedly reprimanded this over the past few years, which ultimately was of little use. Emeritus professor and compliance specialist Monika Roth has a firm opinion on the role of Finma. She says the demise of CS is also a failure of the financial market regulator.
SRF News: Ms. Roth, what exactly are you accusing Finma of?
Monika Roth: Finma watched CS for far too long. Scandal has followed scandal for ten years. And actually, these scandals can always be traced back to the same root causes: gross organizational deficiencies and false incentive systems. Finma says it has six enforcement procedures (see box) carried out – that’s only a quarter of the cake. If you look at all the proceedings abroad, you can see that the history of CS has become primarily a judicial history. And here Finma should have intervened much earlier with the CS leadership – and it didn’t do that.
In an interview with the “Tagesanzeiger”, Finma boss Urban Angehrn said that there is no fully comprehensive supervision that avoids every accident.
I also read this phrase. This is of course a trivialization of the matter. That’s the argument that will calm you down and get rid of you. But the fact is: This is not about fully comprehensive insurance, but about a systemically important bank that has paid twelve billion in fines abroad in recent years. The consequences of this business practice are now primarily borne by the taxpayer.
Politicians have failed to position Finma better.
In the said interview, Angehrn also says that Finma has done everything within its means. So he plays the ball back to politics. After the banking crisis in 2008, did politicians fail to establish stricter rules and a stronger authority?
Yes, that’s what politics has failed to do. And of course it has to be said that the current outrage of certain politicians and parties is covering up what they did when Finma was founded. At that time it was all about the structure of Finma and its competencies. And also about sanctions.
When the then predecessor organization SFBC proposed sanctions such as fines, the financial world almost stood on its head in outrage, followed by politicians – corresponding requests were scuttled. The question of Finma’s independence and its specific tasks also came up again and again. It is impossible to associate a supervisory authority with the obligation to promote the financial center and make location policy. This is fundamentally contradictory. Politics is responsible for that.
Finma needs the competence to issue fines.
What does Finma need to be able to prevent a CS case in the future?
You have to look at the finma. Also ask how the supervision is structured. And Finma certainly needs the ability to fine – both towards companies and towards senior managers, i.e. the management staff. Then it also needs the competence to claim profits from serious regulatory violations from individuals. Here I am talking about bonuses that are linked to the corresponding action. Then I also think that Finma needs to be given better powers in terms of incentives and that it should then use them.
Raphael Günther conducted the interview.