Switzerland’s government, drawing on the lessons of the collapse of Credit Suisse, launched consultations on new banking rules that could limit bankers’ bonuses.
The Federal Council said the consultations would cover measures designed to “strengthen corporate governance”, ensure banks are prepared for crises, and grant greater powers to the financial market supervisory authority (FINMA).
“The aim is to strengthen resilience and confidence in the Swiss financial system whilst protecting our economy, taxpayers and the state,” Finance Minister Karin Keller-Sutter told journalists in Bern.
The proposed measures focus in particular on bankers’ bonuses. They propose to withhold or recover bonuses from “the most senior or most highly paid managers at systemically important banks” in the event of rule-breaking or mismanagement.
The goal is to avoid payment packages that encourage excessive risk-taking.
“The Federal Council wants remuneration to be geared towards long-term profit,” said Keller-Sutter.
The consultation will start in late August and run until November.
In March 2023, the finance ministry, the central bank and FINMA were forced to find an emergency solution for Credit Suisse as it teetered on the brink of bankruptcy. They opted for a takeover by its domestic rival, UBS.
However, given the size of UBS following this merger, the government is pushing the bank to strengthen its capital base so it can withstand a crisis or market shock.
In particular, it wants to tighten capital requirements for overseas subsidiaries, UBS executives oppose this, arguing it will undermine the bank’s competitiveness.
