The Credit Suisse Review criticizes SNB and Finma, as expressed by SZ.

(VOR News) – According to a report published in SonntagsZeitung, the financial Credit Suisse regulator Finma, the central bank of the country, and the Federal Council have been harshly criticized by the preliminary findings of the Swiss parliamentary commission that is investigating Credit Suisse’s collapse in 2023.

The Federal Council and the Council of the Federal Republic are additional institutions subjected to criticism.

Credit Suisse’s collapse will be investigated by the commission in 2023.

Despite the fact that the bank had been classified as systemically important for a number of years and that its troubles had been evident for a number of months, the publication contended that the authorities were ill-equipped to prevent or contain the company’s dissolution.

This occurred despite the bank’s prolonged financial difficulties.

This would be in accordance with the Credit Suisse findings of a previous study conducted by Paul Tucker, who is presently a fellow at the Harvard Kennedy School and has served as the deputy governor of the Bank of England. These results would be consistent with the results of the previous evaluation.

The Swiss finance department issued the “Too Big to Fail” study in April, which was based on the foundation provided by this research.

The SonntagsZeitung’s article did not contain any information regarding the legislative report’s origin. Credit Suisse received a request for comment from the Swiss finance minister, members of the committee, and FinMA; however, they declined to comply. The request was received by Bloomberg.

It is anticipated that the investigation will have successfully concluded by the end of the year, in accordance with the most recent forecasts.

Finma, the Swiss agency responsible for overseeing the financial sector, has been subjected to criticism for its lack of firmness, according to SZ. Finma is accountable for overseeing the financial sector.

The Financial Markets Authority (Finma) should be granted additional authority in view of the study’s conclusions. The Swiss government has given some consideration to this matter; however, the regulator has not yet been granted the authority to impose penalties on financial institutions.

Currently, Switzerland is grappling with the challenge of effectively managing a vast financial industry that is dominated by a bank that is more than twice the size of its current economy.

UBS Group AG bought Credit Suisse after it collapsed and this obstacle arose.

Switzerland has been confronted with the challenges of administering a vast financial industry since that time.

The Swiss National Bank was not exempt from the interim conclusion procedure, as indicated by the study’s findings that were disclosed to the public on Sunday. It was explicitly stated that the central bank was overly restrictive in its provision of emergency liquidity during Credit Suisse’s difficulties and that it failed to adequately inform the public about these issues at an early stage.

Furthermore, it was observed that the central bank was unsuccessful in its efforts to raise awareness of these issues among the general public.

Credit Suisse made an effort to contact the Swedish National Bank (SNB); however, they declined to provide a response when approached.

However, the organization responded to the issue in its annual report, which was disseminated prior to the commencement of this year.

The investigation concluded that “Credit Suisse’s preparations were insufficient to fully leverage the potential for liquidity assistance.”

This accusation was made at the outset of the report that is presently being examined. To begin with, the prerequisites that were in place prior to the delivery of specific assets as security were not met in a manner that was both legitimate and enforceable.

This was the situation with respect to specific assets. Secondly, a substantial number of the assets that were eligible for the loan had been encumbered in the past, indicating that they had been committed in addition to previous financial transactions that the bank had conducted. This was the second factor that contributed to the loan’s approval.

SOURCE: YN

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