Even UBS isn’t opposed to tighter regulations: Finma needs more competence

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.