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Ah! Nobody actually wants to hold on to the hot potato that is big bank regulation. It is better to transfer this from one person to another. It would actually be quite simple: “We need a resilient financial sector to be prepared for future crises,” Finma President Marlene Amstad (55) said at the financial market regulator’s annual media conference.
An important building block for this: a supervisory authority that follows the issue closely and can take strict measures when necessary. And I want to do this too.
Following the demise of Credit Suisse, the safety net of a reeling major bank has been thinned. That’s why it’s so important for Finma to gain more competence. Just like he wanted several times.
Public stress tests
It wants a stricter legal framework for banking supervision and, among other things, greater powers to provide public information about measures imposed on banks and bankers.
However, Finma first needs to be clear about what information it wants to convey. In some countries, it is common practice to report in detail the results of stress tests and therefore the vulnerabilities of institutions.
Thomas Hirschi (49), who heads Finma’s banking division, explains when asked by Blick: “There are definitely advantages to publishing stress tests because of course you can also have a disciplining effect on the market.” If a bank’s weaknesses are made public, it will do everything it can to fix them.
Don’t miss the opportunity
Finma also wants to be able to impose fines on institutions that commit crimes, like their foreign counterparts. Politics should make this possible for him. “But Finma is not a criminal authority. “But the monetary impact will never be as high as we know from some cases abroad,” says Hirschi. “Preventive, disciplinary effect is our priority.” It’s the right approach. The goal is to prevent the next bank earthquake and not just quench the public’s thirst for punishment.
Currently the hot potato is in the hands of the Federal Council. This should lead to a report in early April on how the “Too Big to Fail” regulation should be changed. The state government would do well to take advantage of the opportunity now to introduce a stricter banking supervision regime. Because even the big bank UBS has no objection to this. An opportunity that may not come again anytime soon.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
