ZURICH, March 26 (Reuters) – Swiss financial regulator FINMA said it is considering whether to take disciplinary action against Credit Suisse ( CSGN.S ) managers after Switzerland’s second-biggest bank had to be rescued last week of UBS (UBSG.S).
FINMA President Marlene Amstad told Swiss newspaper NZZ am Sonntag that it is “still open” whether new proceedings will begin, but that the regulator’s main focus is on the “transitional integration phase” and “maintaining stability of finance”.
UBS agreed to buy Credit Suisse for 3 billion Swiss francs ($3.26 billion) in stock last week and assume losses of up to 5 billion francs in a merger engineered by Swiss authorities amid turmoil in global banking market.
Credit Suisse on Sunday declined to comment on the FINMA President’s comments when asked by Reuters for a response.
Asked if FINMA was looking into holding Credit Suisse’s current managers responsible for the collapse of Switzerland’s second-largest bank, Amstad said it was “exploring options”.
“CS had a cultural problem which translated into a lack of responsibilities,” Amstad was quoted as saying by NZZ, adding: “Many mistakes were made over the years”.
FINMA has conducted six public “enforcement proceedings” against Credit Suisse in recent years, Amstad said.
“We intervened and used our strongest instrument,” he said of its previous moves.
Amstad also defended Switzerland’s decision to write down 16 billion Swiss francs of Credit Suisse Additional Tier 1 (AT1) debt, to zero as part of a forced rescue merger.
“The AT1 instruments are contractually provided that they will be completely canceled in the event of a trigger event, especially the provision of exceptional government support,” said Amstad.
“Bonds were created exactly for such situations.”
In a separate interview with Swiss newspaper SonntagsZeitung, FINMA CEO Urban Angehrn defended its role in dealing with Credit Suisse before the takeover.
“We continued to intervene in these cases, used our instruments, and they had an impact,” he said. “We don’t run the bank, that responsibility rests with the board of directors and the management of the bank.”
Angehrn also said that there are open discussions about expanding FINMA’s capabilities, such as the ability to issue fines, which despite having “sharp instruments” it currently does not have.
“We don’t have a “senior managers regime”, which would help with the issue of manager responsibility, and FINMA is limited in dealing with cases.”
($1 = 0.9199 Swiss francs)
Reporting by Noele Illien; Editing by Alexander Smith
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