Switzerland's Financial Market Supervisory Authority (FINMA) will probe Credit Suisse Group AG CS bank and potentially take disciplinary action against the financial services firm.
FINMA will probe how top managers ran the Credit Suisse bank in the lead-up to its collapse and takeover by UBS Group AG UBS, reports Bloomberg.
"Credit Suisse had a cultural problem that translated into a lack of accountability," FINMA President Marlene Amstad told the Sunday newspaper NZZ. "Often, it was not clear who was responsible for what. This favored negligent handling of risks."
When asked whether FINMA is considering holding current Credit Suisse managers accountable for the collapse of Switzerland's second-largest bank, Amstad said it is "exploring the options."
"CS had a cultural problem that translated into a lack of responsibilities," Amstad said, adding that "numerous mistakes were made over several years."
Last week, UBS Group UBS agreed to pay $3.25 billion in stock to acquire Credit Suisse. UBS said the two's merger would create a business with more than $5 trillion in total invested assets and sustainable value opportunities.
The combined business is expected to generate an annual run-rate of cost reductions of more than $8 billion by 2027.
UBS expects the deal to accrue to its earnings per share by 2027. It also said it remains capitalized well above its target of 13%.
Following the bank's acquisition, questions have been raised about FINMA's role and whether the regulatory body should have prevented Credit Suisse's collapse.
"We intervened earlier, and very intensively, where there were breaches of supervisory law. But especially when we act harshly, it usually doesn't become public," Amstad said in defense, according to NZZ.
"Imagine if it had become known that we were already working on CS's restructuring order in November or that we had asked CS to prepare alternative solutions for the case that had just occurred," she added.
In an interview with German publication SonntagsZeitung, FINMA CEO Urban Angehrn said that FINMA lacks a "senior managers' regime that would allow the watchdog to more quickly identify responsibility or place blame, which means that afterward, there are no more excuses."
"We've had quite an effect over the years. We pushed the limits of our mission," Angehrn said. "But, as the federal councilor said, you cannot regulate away a crisis of confidence."
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