Credit Suisse (Reuters)
banking crisis
The head of “Credit Suisse” accuses social media of contributing to flooding the bank
The Swiss Financial Markets Supervision Authority (Finma) is studying ways to hold Credit Suisse officials accountable in the aftermath of the crisis that hit it, according to what the authority’s president announced in media statements.
“We are not a criminal authority, but we are exploring possibilities,” Marilyn Amstad said in an interview published by the newspaper “NZ am Sonntag” on Sunday.
The swift intervention of UBS to rescue rival Credit Suisse, under pressure from government and regulatory authorities, has caused controversy in Switzerland.
Many observers fear that the size of “UPS” has become greater than its capabilities, while Amstad said that it should gradually raise capital and liquidity.
The acquisition came in the wake of banking turmoil in the United States that prompted investors to sell their shares in institutions considered weak such as Credit Suisse, which has been plagued by scandals over the past two years.
Charges of flooding the bank
The Chairman of the Board of Directors of “Credit Suisse”, Axel Lehmann, accused social media of contributing to dumping the bank.
But according to Amstad, who previously worked at Credit Suisse, “it is clear that the controversy on social media is not the cause of Credit Suisse’s problems”.
She added that the bank’s problems were “long-standing and resulted from many scandals and management mistakes in recent years. The bank was already in the midst of a crisis of reputation and confidence.”
Noting that the problems of Credit Suisse were not limited to one business sector, she confirmed that the bank has a very large number of employees who performed their work properly.
Weakness in taking responsibility
“In the end, it failed because of the numerous scandals and bad decisions taken by the management. The bank’s management clung to a strategy of taking high risks for a long time, but was not able to manage these risks properly. This problem persisted for several years,” the head of the Swiss Financial Markets Supervisory Authority continued.
And she added, “I will not give a name, but many mistakes were made over several years. Credit Suisse had a culture problem that reflected a weakness in assuming responsibility.”
Some observers accused the state and the watchdog of being late, while several parties called for a parliamentary investigation to shed light on Fenma’s role in the crisis.
But Marilyn Amstad downplayed the importance of these criticisms, noting in particular that FINMA’s interventions with banks are not always publicized.
She stressed that “weak institutional culture and strategic management errors in estimation cannot be completely eliminated through strict regulatory rules.”
According to a poll conducted by the Sotomo Institute and published by Sunday’s Sonntag Blick newspaper, two out of three Swiss oppose UBS’ takeover of Credit Suisse.
High concentration of risk
Four out of five respondents also called for UBS to keep the activities of the local branch of Credit Suisse separate in order to avoid a high concentration of risk.
And 61% of those surveyed confirmed that they would prefer if the state nationalized “Credit Suisse” and sold it later.
But the FINMA chief said there were few examples of successful nationalization of banks.
In the interview, she indicated that “the union and the authorities agreed that this would be the worst solution for the state, taxpayers, the Swiss stock exchange and international markets.”
