Finma fires its chairman: How Ueli Maurer deliberately weakened banking supervision

As the investigation shows, Ueli Maurer deliberately weakened the financial market supervisory authority (Finma), which he led politically. He is said to have personally ensured that the former Finma chairman’s term ended prematurely. In doing so, he permanently weakened the supervisory authority, just at a time when Credit Suisse’s problems were dramatically worsening.

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Thomas Bauer (68) was elected Chairman of the Financial Markets Authority by the Federal Council under the chairmanship of Finance Minister Widmer-Schlumpf in mid-2015. The Basel lawyer started working at the same time as Ueli Maurer, at the beginning of 2016. He was a soft-spoken man and rarely gave interviews. It is important for a supervisory authority to deal with those supervised “efficiently, reliably and respectfully”, he once told “Switzerland on Sunday”. “Bank-friendly” is not a trait that an authority would consider a compliment.

He left the stage to Finma’s chief executive, Mark Branson, 55, who has been in operational management since the spring of 2014. It was he who imposed the world’s strictest capital requirements on Swiss banks. He was the one who stood up to them when they asked for relief. Branson knew exactly what made the bankers tick; He was one of them, most recently serving as CFO of global asset management at UBS.

Bauer-Banson duo rolled

Branson appeared to be a confident man and was able to achieve this because he had Bauer’s political support. The Bauer-Banson duo rolled. When the Covid crisis broke out at the beginning of 2020, Credit Suisse had difficulty providing sufficient liquidity for the first time. A warning sign. Branson implemented higher liquidity buffers in CS. This means the bank can barely cope with the massive outflows in October 2022. Branson called for further tightening of control but received no further support from Maurer.

In July 2019, Thomas Bauer was elected for another three-year term. But this shouldn’t last long. He announced his resignation in March 2020. According to the investigation, Ueli Maurer rudely made it clear to the head of Finma that he no longer wanted to work with him. Bauer would like to continue his three-year term at least until the end of 2023. But things turned out differently. Marlene Amstad (55) was appointed as Bauer’s successor on March 13, 2020. She has been serving as the institution’s vice president since 2018. The top position was filled without a formal advertisement.

Banson’s condemnation

Amstad officially took office at the beginning of 2021. Shortly thereafter, there was a scandal with Finma director Branson. As Reuters news agency revealed this week, he is said to have begun requesting information about banking supervision from Finma staff after taking office, which insiders interpret as a measure from Branson.

Amstad is said to have requested additional staff from Finma’s board of directors to further expand its control over Branson. However, this staff position was never created as Finma leadership successfully resisted this. A few months later, Branson submitted his resignation and is now chairman of German supervisory authority Bafin. His successor was Urban Angehrn (58), who had an insurance background.

The situation at Credit Suisse worsened with each scandal, while Finma was further weakened by the departure of other senior officials. The heads of the banking supervision and bank analysis departments were removed from power. According to Finma, Amstad did not intervene in the audit work, but instead “reorganized” the work of the supervisory board.

fatal constellation

Finma’s new constellation has been especially deadly in the autumn of 2022. The Federal Reserve clearly recognized how dramatically bad things were for the big bank. SNB President Thomas Jordan (60) wanted to pump 50 billion francs into the bank and nationalize it. He concluded that this was the only way to solve the crisis. However, Finma and Ueli Maurer’s finance department rejected the nationalization, as did Credit Suisse’s management. Since no agreement could be reached, the authorities decided to abandon the bank to its fate.

Maurer said that when he leaves the Federal Council at the end of 2022, the CS should be left alone for a year or two, then everything will be fine. Today we must say: His words were a deliberate and completely false representation of reality. When the bank was driven into bankruptcy by further withdrawals in March, Swiss authorities were unprepared and had only one realistic option: sell to arch-rival UBS.