Swiss financial regulator finds strategy and management shortcomings led to Credit Suisse collapse
FINMA found the 'inadequate implementation' of strategic focus areas, alongside several scandals and management errors, led to the bank’s demise in March 2023.
In its report on the Credit Suisse crisis published today (19 December), FINMA found the «inadequate implementation» of strategic focus areas, alongside several scandals and management errors, led to the bank's demise in March 2023.
These issues were responsible for Credit Suisse's clients, investors and markets losing confidence in the institution, resulting in high levels of withdrawals of client funds which became the catalyst for its «immediate insolvency» earlier this year.
For instance, FINMA found that, even in years where the bank reported losses, its variable remuneration remained high, with shareholders making «little use of the possibilities available to them» to influence remuneration.
ECB supports creation of global standards for AT1 bonds after Credit Suisse wipe-out — reports
The regulator also highlighted how, although satisfying capital requirements, these were not enough to prevent the «huge crisis of confidence». Additionally, Credit Suisse's parent company, CS AG, had the «weakest capital adequacy within the group, which made it the weakest link in the chain».
FINMA noted its supervision of Credit Suisse was not only circumscribed to the events of March 2023. Since 2012, 43 preliminary investigations into the bank were conducted, leading to nine reprimands, 16 criminal charges being filed, and 11 enforcement proceedings being completed against the bank and three individuals.
Between 2018 and 2022, the Swiss regulator conducted 108 on-site supervisory reviews and recorded 382 points requiring action, it said, with 113 of such points being
Read more on investmentweek.co.uk
