The Swiss financial regulator, Finma, has attributed the downfall of Credit Suisse to its compensation systems. According to a report by Finma, the bank’s bonus system failed to prevent losses or encourage good behavior. The report also highlighted governance issues as a major factor in the bank’s collapse.
Finma stated that it had utilized all available means to supervise Credit Suisse but lacked the necessary powers to intervene effectively. However, there have been reports suggesting that Finma, the Swiss government, and the central bank were slow to respond to the deteriorating situation at the bank.
Finma has faced criticism for its directive to write off CHF 16 billion in contingent convertible bonds at Credit Suisse. Despite this, the regulator has been praised for its transparency and identification of persistent deficiencies in risk management and leadership at the bank.
The report also revealed that the compensation system played a significant role in the identified shortcomings. Variable bonuses remained high even in years of substantial losses. The report criticized influential shareholders for not exerting their influence over compensation decisions, despite public criticism at annual general meetings.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | 🇨🇭 |
| Sentiment | very negative |
| Relevance Score | 1 |
| People | Sergio Ermotti, Brady Dougan |
| Companies | Nationalbank, Reuters, Eidgenössische Finanzmarktaufsicht (Finma), Credit Suisse, Bund, UBS |
| Currencies | None |
| Securities | None |
