New Finma Director Advocates for Increased Equity at UBS

Stefan Walter, the new head of Swiss Financial Market Supervisory Authority (Finma), addressed a small banks symposium in Bern’s Stade de Suisse, where he emphasized the need for early intervention in bank supervision. He stressed that supervisory instruments must be used in normal operations to prevent crises before they escalate.

Walter’s goal is to turn Finma into a “best-in-class” supervisory authority capable of intervening earlier in the operations of banks, especially large ones like UBS. He cited Finma’s failure to stabilize Credit Suisse before its rescue as a lesson learned and urged stricter capital requirements and restrictions on capital distributions and remuneration.

Walter also proposed that UBS increase equity at the parent company level to prevent vulnerabilities similar to those exposed during the Credit Suisse crisis. This suggestion has sparked skepticism from analysts who question the feasibility of early intervention and its potential impact on economic freedom. However, Walter remains committed to improving Finma’s supervisory capabilities and preventing future banking crises.

By Sophia Gonzalez

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