Swiss financial watchdog boosts supervision of mega bank UBS

If politicians could be convinced of allowing new instruments for FINMA, it could effectively supervise a bank as large as UBS, Amstad said. © Keystone / Peter Schneider

Around 60 people at the Swiss Financial Market Supervisory Authority (FINMA) are now directly or indirectly responsible for the supervision of the major bank UBS, FINMA president Marlene Amstad told Swiss public radio SRF on Saturday.

In August 2023, FINMA had said that following the takeover of Credit Suisse by UBS, 22 FINMA employees were now directly responsible for supervising UBS. The regulatory authority will not only merge the teams that previously supervised the two banks but will also boost their numbers.

In response to the question of whether this would be sufficient in view of a UBS with tens of thousands of employees and international activities, Amstad said that her organisation also has an international network. It cooperates actively with foreign supervisory authorities. Moreover, FINMA is not there to replace the management bodies of a bank.

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Amstad went on to explain that if politicians could be convinced of allowing new instruments for FINMA, it could also effectively supervise a bank as large as UBS.

Senior Managers Regime

FINMA has been saying for some time that it needs new instruments, such as the authority to impose fines. It also wants a clearer allocation of responsibilities at banks: the so-called Senior Managers Regime.

Under this scheme, a bank must set out in writing who is responsible for what. Amstad said that 2-5% of those at the top of a financial institution would be covered by this regulation. This would motivate managers to take a closer look because it would be clear in advance who is responsible. This would also simplify the task of supervision.

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FINMA also considers the possibility of regularly publishing completed enforcement proceedings (proceedings to enforce supervisory law) to be expedient. At present, these are often not made public. A “more solid legal mandate” is also necessary for effective intervention in remuneration systems, FINMA representatives said in December.

With regard to enforcement proceedings, Amstad emphasised that only the results of completed proceedings would be published, not the results of ongoing proceedings. In the case of ongoing proceedings, publication would be “very sensitive”.

More stringent instruments for FINMA have already been discussed at a political level but are controversial. In December, the Swiss Senate rejected a motion from the economic affairs and taxation committee calling for stricter instruments for the financial watchdog. A majority of senators argued that they did not want to pre-empt ongoing work in connection with the Credit Suisse crisis.

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