ZURICH (Reuters) – Switzerland’s financial watchdog FINMA said it is considering disciplinary action against the directors of Credit Suisse (CSGN.S) after UBS (UBSG.S) bailed out Switzerland’s second-largest bank last week.
FINMA president Marlene Amstad told Swiss newspaper NZZ am Sonntag that it was “still open-ended” on whether new measures would be initiated, but that the regulator’s main focus was on “the transition to integration” and “maintaining financial stability”.
UBS agreed to buy Credit Suisse for 3 billion Swiss francs ($3.26 billion) of shares a week ago and take up to 5 billion francs of losses in a merger engineered by Swiss authorities during a time of market turmoil in global banking.
On Sunday, Credit Suisse declined to comment on the Finma chairman’s comments when asked by Reuters for a response.
Asked if FINMA was looking into holding Credit Suisse’s current directors accountable for the collapse of Switzerland’s second-largest bank, Amstad said it was “studying options”.
“The CS had a culture problem that translated into a lack of responsibilities,” Amistad was quoted by NZZ as saying, adding, “Many mistakes were made over several years.”
Amstad said FINMA had conducted six public “enforcement actions” against Credit Suisse in recent years.
“We intervened and used our most powerful tools,” she said of her past moves.
Amstad also defended Switzerland’s decision to write off CHF16 billion of Credit Suisse’s additional Tier 1 (AT1) debt, to zero as part of a forced rescue merger.
“AT1’s sukuk contractually provides that it will be written off in its entirety in the event of a launch event, in particular the granting of exceptional government support,” Amstad said.
“Bond was created specifically for such cases.”
In a separate interview with Swiss newspaper SonntagsZeitung, FINMA CEO Urban Angehrn defended its role in doing business with Credit Suisse prior to the takeover.
“We’ve constantly intervened in these cases, used our tools, and they’ve had an effect,” he said. “We do not run the bank, that responsibility rests with the board of directors and the bank’s management,” he added.
Ungern also said there are open discussions about expanding FINMA’s competencies, such as its ability to issue fines, which it does not currently have despite having “sharp tools”.
“We do not have a ‘senior managers system’, which can help with the issue of manager liability, and FINMA is limited in reporting cases.”
($1 = 0.9199 Swiss francs)
(Reporting by Noel Ellen) Editing by Alexander Smith
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