Now it’s Karin Keller-Sutter’s turn: Finma is failing at the stupidest time

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Since the collapse of Credit Suisse, the Swiss Financial Market Supervisory Authority (Finma) has come under severe criticism. Two weeks ago, there was a big explosion when director Urban Angehrn (58) unexpectedly resigned. With more senior employees leaving, the leadership crisis is now completely out of control. Marlene Amstad (55), the institution’s chairman of the board since 2021, is in the eye of the storm.

He cannot hold the authority together. His leadership style, or rather his lack of leadership experience, has come under criticism. In his previous life, he was a researcher, consultant, and professor, but he never led a large organization. However, Finma is not a research department, but an authority with 550 full-time positions. Especially in times of crisis, leaders who can keep the unstable workforce together are needed.

Keller-Sutter has been idle for too long

The political responsible for this fiasco was Bundestag Member Karin Keller-Sutter (59). He must have been accused of watching for too long. She could have taken action months in advance. She could have realized after the collapse of credit Suisse that things could not go on like this. But she kept the store running. This laissez-faire attitude can work.

Because with the agreement made by the state, politicians created a huge financial giant above all other Swiss banks. UBS is so large that if it collapsed it would be unlikely to be absorbed by the state. Not just “too big to fail,” but also “too big to fail,” meaning too big to be saved.

Finma’s deplorable situation raises doubts about its assertiveness. This is bad. Strong regulation is of great interest not only to Swiss taxpayers but also to UBS. International financial markets are closely watching how Switzerland will regulate the superbank in the future. Weak and unclear supervision undermines trust. In Bern this can be taken for granted.

How can Switzerland become a credible banking regulator again?

So how can Switzerland find its way back to reliable banking supervision? Three points are important:

First: Finma neither needs new vehicles nor more staff, as Marlene Amstad demands. With the guarantee clause, the authority already has an extremely powerful tool in its hands to dismiss bank managers. What is needed is practical knowledge of how a large bank works, what dynamics occur in crisis situations, how the balance sheet is managed, how liquidity and risks are managed. Does Finma have this information?

Second: Finma must be able to place its messages so that they are received by UBS. The director needs to have the format to call UBS Chairman Colm Kelleher (66) to Bern to calmly explain what is expected of him and what is not. But the problem is that no one in the highest governing bodies has the necessary leadership to stand up to the bosses of the big banks.

Third, fundamental questions also need to be on the table. Does it really make sense to put banks, insurance companies and the financial market under the control of a large authority? Or is there a need for an independent intervention force focused on banks, namely the revival of the Federal Banking Commission (EBK)?

*Journalist Beat Schmid writes about financial matters at SonntagsBlick. He is the editor of the online media Tippinpoint.ch.

Source :Blick