FINMA director expects cooperation and transparency from banks

"I demand complete and unfiltered access to all information", said the director of the Swiss Financial Market Supervisory Authority (FINMA). Keystone / Peter Klaunzer

The new head of the Swiss Financial Market Supervisory Authority (FINMA), Stefan Walter, has made his position on tighter supervisory powers demands clear: one principle is "no surprises", said the top bank supervisor in an interview with the Neue Zürcher Zeitung newspaper.

He expects financial institutions to inform him proactively about developments relevant to stability. “I demand complete and unfiltered access to all information”, said the director of the Swiss Financial Market Supervisory Authority (FINMA) in the interview published on Tuesday.

Walter wants to see an institution for what it is. His focus is on protecting taxpayers from having to bail out an institution in the event of a crisis.

More staff

If a bank does not cooperate, on-site inspections will be carried out. The law should not be allowed to restrict supervision during such checks, said Walter. More inspections would also require more staff, as the interview also revealed. It is still too early for exact figures, said Walter. However, he believes that a system change would have a “very substantial effect on the number of staff”.

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If controls are not sufficient, FINMA intends to take tougher supervisory methods in future. “In extreme cases, it must be possible to hold individuals accountable and, if necessary, remove them,” he said, reiterating FINMAs call for a senior manager regime. The hurdle for this is very high under the current legal situation, said the FINMA boss.

Informing the public

FINMA is also fundamentally prohibited from providing information about its enforcement proceedings. “In future, non-communication should be the exception,” said Walter. This would have a disciplinary effect. It also shows what the supervisory authority achieves.

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According to Walter, preventative measures are more effective than, for example, clawback clauses for bonuses that have already been paid out. “The earlier you recognize a problem, the more effective you are,” the bank supervisor was convinced.

Federal Council outlines measures

The Federal Council wants to expand FINMA’s powers. To this end, the government formulated possible measures in April. On the one hand, the supervisory authority should be able to intervene more easily in various areas. On the other hand, it should be able to assert itself more effectively by expanding its range of instruments.

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The Federal Council’s aim was to present two packages for implementation in the first half of 2025: one with amendments at ordinance level that can be adopted by the Federal Council, and one with the key parameters for the amendments at legislative level that will be submitted to Parliament.

Adapted from German by DeepL/amva

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