Credit Suisse: what is a parliamentary inquiry committee?

In Swiss political history, only four parliamentary committees of enquiry have ever been formed. © Keystone / Alessandro Della Valle

A parliamentary inquiry committee, the Swiss parliament's most powerful investigative instrument, on the takeover of Credit Suisse by UBS looks set to be formed. The offices of both chambers of parliament as well as their steering committees are in favour of the inquiry.

What is a parliamentary inquiry committee?

The decision to form a committee could be taken during the summer session of parliament, which just started on May 30 and goes until June 16. Until now, only four parliamentary inquiry committees have previously been established. Parliament can set up an inquiry committee “in the case of significant events which must be investigated”, according to Article 163 of the Parliament Act. As the most powerful instrument available to the national chambers of parliament, the committee is responsible for “establishing the facts and gathering other evidence”. It has extensive powers to do so. At the end of its work, it publishes a report.

In order to establish an inquiry committee, both chambers must adopt a federal decree. The government is consulted, but cannot oppose it. The decision will likely be formally taken soon, the earliest point possible is during the June session of parliament. There is now little room for doubt it will happen: the offices of the House of Representatives and the Senate as well as the steering committees of both chambers have declared themselves in favour of creating a parliamentary inquiry committee.

What is the purpose of a parliamentary inquiry committee?

The parliamentary inquiry committee’s mandate and the resources allocated to it will be defined by parliament in the decree. One thing is certain: members of parliament don’t want to limit the investigations to the events that took place in March 2023. They “must also take account of relevant developments in previous years”, the steering committees emphasised in their press release of May 15. A list explicitly outlines all the subjects to be clarified:

• the early detection of crises by the finance ministry, headed by Ueli Maurer of the Swiss People’s Party until the end of 2022, and the government’s involvement;
• the supervisory activities of FINMA, the Swiss financial market supervisor, in relation to Credit Suisse;
• the role of the Swiss National Bank;
• evaluation and monitoring of the effects of the “too big to fail” legislation,  adopted in the wake of the 2007-2008 financial crisis, and the UBS bailout, which was intended to prevent the failure of a systemically important bank from endangering the entire economy;
• the use of emergency powers and the circumstances of the decision in March 2023.

Which members, and with what resources?

A parliamentary inquiry committee is composed of an equal number of members from the House of Representatives and the Senate and belongs to both chambers. The numerical strength of parliamentary factions determines its composition and the allocation of the presidency and vice-presidency. The law also recommends that the different languages and regions of the country be taken into account ‘as far as possible’.

The parliamentary inquiry committee has its own secretariat and may have access to staff provided by parliament. If necessary, it can also hire additional staff.

Extended powers and secrecy obligation

The parliamentary inquiry committee has the same right to information as the delegations of supervisory committees (the steering committee and finance committee). That means it may hear witnesses and consult confidential material and the minutes of cabinet meetings. In addition, it may entrust an investigator with the task of assembling evidence.

Participants in the meetings or hearings of the parliamentary inquiry commission are obliged to keep the proceedings a secret until the committee’s report is published. General provisions governing the confidentiality of committee meetings remain applicable even after the final report has been presented to parliament.

Individuals who give false testimony to an inquiry committee or experts who provide false reports are criminally liable to a custodial sentence of up to five years or a fine. People who refuse to testify or provide documents without a legal reason are liable to a fine.

The rights of inquiry participants

The government appoints one of its members to represent it at the parliamentary inquiry committee. The government has the right to attend hearings of witnesses and those called upon to give information and can ask them supplementary questions, consult documents submitted to the commission, the expert reports and the minutes. It may also submit a report to parliament.

People whose interests are directly affected by the investigation have the same rights, subject to conditions. They may be assisted by a lawyer. At the end of the investigation, before the report is published, a person implicated by the parliamentary inquiry committee can consult the passages concerning them and respond orally or in writing.

Previous Swiss parliamentary inquiries

In Swiss political history, only four parliamentary inquiry committees have been established. The first enquiry dates back to 1964. Chaired by the future government member Kurt Furgler, it concerned overspending on Mirages fighter jets. At the parliamentary inquiry committee’s recommendation, the number of the French fighter jets purchased was reduced from 100 to 57.

The second parliamentary inquiry committee was established in 1989 following the resignation of Elisabeth Kopp from the government. Chaired by Moritz Leuenberger, also a future member of the government, it revealed the existence of a politically motivated internal police force that had placed hundreds of thousands of citizens under surveillance. This “file scandal” left a lasting impression on the Swiss political landscape.

This led to the establishment of a third parliamentary inquiry committee in 1990 to investigate the activities of the defence ministry. The investigations, conducted under the chairmanship of Senator Carlo Schmid, uncovered the existence of a secret army operating without any legal basis or political control. Created in 1979 to organise resistance in the event of an invasion by communist forces, the P-26 was disbanded in November 1990.

The fourth and last parliamentary inquiry committee was set up in 1995 to investigate malfunctions in the national pension fund. In its conclusions, the commission, chaired by Senator Fritz Schiesser, laid the chief blame for the mismanagement on the former finance minister Otto Stich.

All other requests to set up a parliamentary inquiry committee have been rejected. For example, parliament opposed establishing an inquiry committee to investigate Switzerland’s complicity with the South African apartheid regime. Also, between 2001 and 2002, it refused to use this instrument in the wake of the Swissair debacle, or in 2008, the rescue of UBS during the financial crisis, or the 2020 spying affair linked to Crypto AG.