the FINMA, which was supposed to be the guardian of the Swiss financial hub, has failed spectacularly in its role. Not only did the supervisory authority fail to act, but it seemed to actively refuse to take action against obvious missteps at Credit Suisse (CS).
Especially disconcerting: those responsible will once again get off scot-free.
A scandal follows another
The list of failures at Credit Suisse reads like a textbook on mismanagement: money laundering scandals, false statements, observation affairs – and in the middle, a FINMA that refused to act. The case of Urs Rohner, the former CEO of CS, illustrates the FINMA’s capitulation.
Although Rohner made false statements multiple times and the bank’s compliance culture was a heap of rubble, the FINMA remained inactive.
A professional ban? Forget about it. Consequences? Not a word.
Instead, the FINMA contented itself with empty reprimands and absurd measures, such as establishing a compliance committee, with Rohner himself at the helm. That’s like appointing a arsonist as the fire chief.
Incompetence or corruption?
The FINMA’s inaction raises uncomfortable questions. Was the authority simply incompetent, or is there more to it? Why were proposals to initiate a disciplinary procedure against Rohner and others stalled? Who pulled the strings in the background to protect the responsible parties? The answer is disheartening: the FINMA was apparently never intended to really take action.
Its lack of punch is politically willful – a result of decades of bourgeois politics that resisted stronger regulation. At the same time, generous bank donations, like those from CS, flowed into party coffers. It’s a perfidious game, where taxpayers ultimately foot the bill for the failure of politics and supervision.
The real losers
While Rohner and his associates get away with millions in severance and lavish pensions, society pays the price. Thousands of employees lost their jobs, customers were harmed, and the international reputation of the Swiss financial hub lies in ruins.
But the really tragic thing is that nothing will change. The political and economic elites of Switzerland have no interest in reforming the system. Why would they? They profit from it.
A bottomless pit
The story of CS and the FINMA is a lesson on how power, money, and influence can corrupt a system. It also shows how dangerous a regulatory authority is that has no teeth – or won’t use them.
If Switzerland wants to prevent such a scandal from happening again, it must fundamentally rethink. A regulatory authority that doesn’t hold banks and their leaders accountable is nothing more than a costly farce. But unfortunately, there is no indication that the responsible parties have learned from this catastrophe.
The consequence? The same people who led the system to bankruptcy will return to high-paid positions.
And the FINMA will continue to watch – as always.