Swiss financial watchdog calls for stronger powers after Credit Suisse crash

investing.com:

By John Revill and Noele Illien

BERN (Reuters) -Credit Suisse came close to imploding months before its eventual rescue, the Swiss financial regulator said on Tuesday in its first detailed account of the crisis, as it argued for stronger powers to oversee lenders in future.

The regulator, FINMA, which has come under fire for its supervision of the bank, defended its role in the meltdown which eventually triggered the biggest rescue of a bank since the global financial crisis of 2008-2009.

The regulator said it took «far reaching and invasive» measures to rectify the deficiencies it found at Credit Suisse as panicked customers withdrew huge amounts of cash after a string of losses and scandals.

But FINMA said that its liquidity measures were unable to avert the imminent failure of the bank in mid-March 2023.

«FINMA used the full range of tools available to it, and identified the risk of possible destabilisation at Credit Suisse at an early stage,» said Thomas Hirschi, head of the regulator's crisis unit.

«Although its actions had an effect, they were unable to overcome the causes of the loss of confidence, such as shortcomings in strategy implementation and in risk management.»

The regulator conducted 108 on site reviews at Credit Suisse from 2018 to 2022, and found 382 «points requiring action» — 113 where the risk was seen as high or critical.

«These figures and measures illustrate that FINMA exhausted its options and legal powers,» it said in its report.

The regulator said it wanted stronger powers, including the ability to impose fines and the option to publish details of enforcement proceedings.

It is also looking to implement a so-called senior managers regime, a set of rules that identify specific responsibilities