The Council of States has taken a notable decision in the ongoing processing of the Credit Suisse crisis, with a majority voting in favor of capping bank executive salaries at a maximum of five million francs. The proposal, put forth by SVP Councilor Jakob Stark, goes against the will of the Federal Council and will now be presented to the National Council. If the National Council also approves the proposal, the Federal Council will need to draft a corresponding bill.
The debate on Wednesday was marked by the PUK report on the CS crisis. In addition to the salary cap, other regulatory measures were agreed upon, including the strengthening of the Financial Market Supervisory Authority (Finma), the limitation of relief measures for capital requirements and the introduction of a Public Liquidity Backstop (PLB). The aim of these measures is to prevent a repetition of the Credit Suisse crisis.
Particular significance was also given to the proposal by Mitte Councilor Beat Rieder, who is calling for a legal basis for the temporary nationalization of systemically important banks in the event of a crisis.
The initiative, dubbed a “guillotine for bankers” would see managers held accountable, both legally and criminally, in the event of a crisis. The Federal Council responded cautiously to this demand, referring to the concept of orderly winding down, which, however, proved inadequate in the case of CS.
The salary cap primarily affects UBS CEO Sergio Ermotti, who received around 14 million francs for nine months of work in 2023. A cap of five million could lead to top bankers leaving Switzerland. Critics warn of a potential exodus of UBS from Switzerland, should the compensation policy be further regulated. London is being mentioned as a potential new headquarters.
The decision of the Council of States reflects a changing political mood. The once untouchable UBS is increasingly in the spotlight. If the National Council also approves the proposal, the banking landscape in Switzerland may experience a historic shift.