Banks: Credit Suisse debacle: Committee sees bank to blame

According to a parliamentary investigation report, the bank itself is responsible for the dramatic collapse of the 167-year-old major Swiss bank Credit Suisse in spring 2023. She lists numerous mistakes.

The bank made a loss of 33.7 billion francs in twelve years, but paid out 39.8 billion francs in performance bonuses to management in the same period, the report says. However, the management of Credit Suisse was not the focus of the parliamentary committee. He should examine the debacle and examine whether regulators failed.

Deficiencies in authority supervision

The chairwoman of the investigative commission, Isabelle Chassot, stated in Bern that there was no causal misconduct on the part of the authorities. But the supervision of the Financial Market Authority (Finma) was not effective. They asserted themselves too little and also granted Credit Suisse relief in terms of equity capital requirements. According to the Commission, the exchange of information between authorities also leaves something to be desired.

What is needed are more effective provisions for systemically important banks and clearer regulations for cooperation between the authorities responsible for financial stability.

Concern about global financial crisis

In March 2023, the troubled Credit Suisse was sold to its competitor UBS in an emergency sale under pressure from the government and with state support. At the time, there were fears of a global financial crisis after three smaller US regional banks had already closed due to insolvency. The danger had been averted, according to the commission.

In the 2022 financial year, Credit Suisse’s loss after speculative transactions and cash outflows was 7.3 billion francs (around 7.8 billion euros today). Credit Suisse failed to stabilize its finances. Despite a new investor, the Saudi National Bank, and a billion-dollar credit line from the National Bank, Credit Suisse bankers were unable to turn things around.