Switzerland's financial regulator gets a new head as the merger of UBS and Credit Suisse sparks calls for reform

Switzerland's financial markets regulator is getting a new chief as the country looks for ways to strengthen banking regulation after the Credit Suisse crisis

From

JAMEY KEATEN Associated Press

January 24, 2024, 8:59 am ET

• 3 minutes read

GENEVA – Switzerland's financial markets regulator is getting a new chief as the wealthy Alpine country looks for ways to tighten regulations after UBS rushed to take over struggling rival Credit Suisse last year, in part to prevent a global banking collapse.

The Swiss government on Wednesday elected Stefan Walter, a 59-year-old German who was director general of the European Central Bank for the past decade, to head Switzerland's financial regulator FINMA.

The agency, along with government officials and bank executives, played a key role in pulling off the mega-merger worth 3 billion Swiss francs ($3.48 billion) after Credit Suisse customers quickly withdrew their money following years of scandals. Swiss authorities feared that the collapse of such a major lender could further roil global financial markets following the collapse of two U.S. banks last year.

The problems at Credit Suisse threatened to jeopardize Switzerland's position as a leading financial market, and the takeover left the country with only one internationally important bank: UBS.

A FINMA report published last month laid out the lessons of the banking disaster and called for a stronger regulatory framework that would, among other things, define banks' responsibilities, give the tax authority the power to impose fines and introduce stricter corporate governance rules.

A parliamentary panel set up after the government-orchestrated merger has been investigating the origins of the deal. In addition, Switzerland's executive branch, the Federal Council, is expected to issue a report this spring on the “too big to fail” rules, which will feed into parliamentary debate about whether and how banking regulation can be tightened.

Walter succeeds an interim boss who has been in office since the departure in September of former FINMA CEO Urban Angehrn, who left the position citing the health consequences of “high and sustained levels of stress” in the position.

Before Angehrn, British-Swiss citizen Mark Branson led the tax authority from 2014 to 2021.

Marlene Amstad, chair of FINMA's board of directors, said Walter's “knowledge of big bank supervision and his connections to international regulators will be a great asset to FINMA's oversight of systemically important Swiss banks.”

Amstad told Swiss public broadcaster SRF on Saturday that FINMA had increased its control over UBS and that around 60 employees were now directly or indirectly responsible for overseeing the combined bank. In August, only 22 employees were directly responsible for overseeing UBS, she said.

Walter, who has a master's degree in international banking from Columbia University in New York, will take up his position on April 1, the Swiss government said.