A series of scandals forced Switzerland to consider fining banks

A series of scandals forced Switzerland to consider fining banks. The outrage over the problems of the Swiss bank Credit Suisse in connection with the collapse of the American investment company Archegos and the loss of billions in investments covered by the bankrupt British company Greensill angered the Swiss authorities and provoked an unthinkable discussion about the possibility of fining banks. The debate focuses on ending the current regime, which prohibits fines for banks, and introducing stricter rules following the British example. "Bank directors are not responsible for their actions because they do not have to. There are no real sanctions for mismanagement," Reuters quoted Gerhard Andrey as a member of the Swiss parliament. "The scandals that hit Credit Suisse, starting with Mozambique and ending with Greensill, are damaging Switzerland's reputation. We have proposed a reform that means that if something goes wrong, the manager will bear the consequences." Andrey's proposal was inspired by the British model, which makes the management of financial companies directly responsible for his decisions. It should be addressed by the Swiss Parliament in the coming days. The controversy arose after Credit Suisse lost more than $ 5 billion (€ 4.12 billion) to Archegos' bankruptcy and is currently facing more than $ 10 billion in lawsuits for lost customer investment following Greensill's bankruptcy. A Credit Suisse spokesman told Reuters that the board had launched an internal investigation that would "take into account the wider implications" of the events. According to him, the situation led to changes in investment banking management and risk control. A series of scandals have angered representatives of FINMA's banking supervision, which cannot punish bank managers. Swiss rules allow managers to be sanctioned only if they are directly involved in the problems that have arisen. General managerial errors must not be fined. A FINMA spokesman welcomed the discussion on personal liability issues and stressed that other financial centers "go much further than Switzerland". He explained that the current rules allow for penalties, such as a ban on working in the banking sector, only if there is a direct link between the manager and the mistake. However, it is often not possible to prove personal responsibility. Despite the write-off of more than $ 15 billion and internal fines in Credit Suisse and other scandals, FINMA was unable to bring the bank under control, and shareholders were unable to dismiss CEO Urs Rohner until he retired last year. Credit Suisse also had a number of other problems, such as the espionage scandal, although in this case the then CEO had to resign. Managers have faced lawsuits in Britain and the United States over loans to Mozambique, which have led the country into a debt crisis. Last year, the US authorities opened an investigation into the role of Credit Suisse in a corruption case worth two billion dollars resulting from loans for the development of Mozambican coastal protection. In response to the wave of scandals, the bank said it had abolished wages for the employees involved, including managers, and would be able to return the money if necessary. Swiss lawyer Monika Rothová thinks that it is practically financially impossible for bank shareholders to seek justice in Swiss courts and sue bank directors. In her opinion, it is necessary to allow banking supervision to reach for managers' salaries. However, she expects strong opposition in the event of another reform. This is also evidenced by the statement of the Swiss Banking Association that the current level of supervision is balanced and rigorous, and that any changes should take into account the specificities of Swiss banking. Dominik Gross, a representative of the Swiss Alliance of Development Organizations, expects parliament's reluctance to change the current rules. "There is a general consensus that the financial center is an integral part of Switzerland, just like watches or chocolate. A large part of the population benefits from the money that comes here."