A-03-21 BIO-FINMA

On December 19, 2023, FINMA published its report on Credit Suisse. This report discusses the background to the collapse (I.), and draws some "lessons learned" (II.). I. In 1856, Alfred Escher helped set up a company that excelled in commercial lending. The Schweizerische Kreditanstalt borrowed from Paul or Virginie at a lower rate than that at which it lent to "Rail" or "Wagon SA", and grew rich on the interest differential. One thing led to another, and the bank moved[...]

The measures adopted by the Federal Council to ensure the takeover of Credit Suisse by UBS represent a significant change of approach from the principles that guided the regulation of systemically important banks after the 2008 financial crisis. The scale of these changes is commensurate with the new crisis that the authorities are seeking to avert. It is all the more astonishing given that, despite the endless list of Credit Suisse defaults revealed in recent years, FINMA and the Swiss[...]