Switzerland’s financial regulatory body, FINMA, is actively considering the implementation of measures to claw back bonuses from bankers in the wake of Credit Suisse’s recent troubles and its subsequent sale to UBS.
In an interview with Schweiz am Wochenende, FINMA Chairwoman Marlene Amstad emphasized the urgent need to address this issue.
Amstad pointed to the long-standing problem of banks incurring substantial losses while continuing to distribute hefty bonuses to their employees.
The recent downfall of Credit Suisse has underscored the need for regulatory authorities to possess enhanced tools and a more robust legal framework to intervene proactively.
To bolster its oversight capabilities, FINMA has already requested expanded powers, including the authority to impose fines, disclose details of enforcement actions, and establish a system of clear responsibilities for senior executives, similar to the regulatory framework adopted in the United Kingdom.
Currently, FINMA lacks the authority to exercise these powers, and any decision to grant them rests with the Swiss parliament.
Marlene Amstad stressed the importance of financial penalties and proper incentives in remuneration practices within the banking sector.
She advocated for greater transparency in FINMA’s proceedings to ensure that the public is informed about regulatory actions taken against financial institutions.
She explained that while FINMA has the necessary enforcement teeth, it should also have the ability to display them, as the current confidentiality requirements can be misinterpreted as inaction, particularly on the international stage.
Furthermore, FINMA is keen on having a say in the remuneration models employed by banks, albeit without the intention of determining specific wage levels.
Amstad clarified that their objective is not to set salaries but to establish legal mechanisms that allow for intervention in the remuneration system when necessary.
In summary, Switzerland’s financial regulator, FINMA, is advocating for more robust regulatory powers, including the ability to claw back bonuses, issue fines, and increase transparency in enforcement actions.
These proposed measures come in response to the lessons learned from the Credit Suisse case, highlighting the need for a more proactive and accountable regulatory approach in the Swiss financial sector.