(MENAFN- The Peninsula)
AFP
Bern: Switzerland's financial regulator was ineffective in tackling the scandals at Credit Suisse, where executive mismanagement scuppered the bank and nearly triggered a global financial crisis, a Swiss inquiry concluded Friday.
“Credit Suisse's long-term mismanagement is the cause of the crisis,” a parliamentary commission of inquiry said, following an 18-month investigation raking over the dramatic March 2023 collapse of one of the world's biggest banks.
“The board of directors and management of Credit Suisse in recent years are responsible for the loss of confidence in the bank.”
The probe found no evidence that the implosion of Credit Suisse was caused by misconduct on the part of the authorities.
Switzerland's second-biggest bank was among 30 international banks deemed too big to fail due to their importance in the global banking architecture.
But the collapse of three US regional lenders in March 2023 left Credit Suisse looking like the weakest link in the chain and its share price plunged more than 30 percent on March 15 last year.
The Swiss government, the central bank and the Financial Market Supervisory Authority (FINMA) then strongarmed the country's biggest bank UBS into a $3.25bn takeover announced on March 19 before the markets reopened the following day.
The government feared Credit Suisse would have quickly defaulted and triggered a global banking crisis that would also have shredded Switzerland's valuable reputation for sound banking.
The authorities' actions“avoided a global financial crisis”, according to the more than 500-page report.
The commission levelled numerous criticisms at the financial market regulators, saying it“deplores the partial ineffectiveness of FINMA's supervisory activity”.
It said it did not understand why, back in 2017, FINMA granted“vast capital relief” without which Credit Suisse would have“had difficulty meeting regulatory requirements” four years later, and“would have been absolutely incapable of doing so from 2022”.
FINMA criticised the remuneration of top executives, but came up against“the bank's reluctance -- and that's a polite way of putting it”, commission member Roger Nordmann told a press conference in Bern.
However, the inquiry“has not identified any misconduct by the authorities that caused the Credit Suisse crisis”.
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