The Swiss Financial Regulator ‘FINMA’ CEO has now resigned in wake of today’s banking crisis, reports Reuters.
“The head of Switzerland’s financial watchdog FINMA has resigned nearly six months after the body drew heavy criticism for failing to prevent the collapse of Credit Suisse.”
Urban Angehrn will step down at the end of September 2023, FINMA said in a statement on Wednesday.
Angehrn, who has led the regulator since November 2021, said he was quitting for health reasons.
“Being able to contribute to the sustainable improvement of the quality of the Swiss financial centre as CEO of FINMA was a unique challenge for me, and one that I tackled with all my might,” Angehrn said.
“However, the high and permanent stress level had health consequences. I have considered my decision carefully and have now decided to step down.”
FINMA said Deputy CEO Birgit Rutishauser will act as interim CEO from Oct. 1.
“The Board of Directors very much regrets this decision and would like to thank Urban Angehrn for his lasting contribution to FINMA during an exceptionally challenging period,” the statement said.
The regulator has come under fire for failing to act sooner, or more effectively, to halt the string of scandals at Credit Suisse in recent years.
“Swiss media has accused FINMA of being too cautious around Switzerland’s large banks, which they reported did not take the regulator seriously.
Credit Suisse for example gave FINMA false and overly positive statements about its business relationship with financier Lex Greensill, the regulator said earlier this year.
The bank’s dealings with Greensill eventually caused a 1.6 billion Swiss franc ($1.80 billion) loss for what was formerly Switzerland’s second-largest lender.
FINMA also communicated poorly and assigned too few people to oversee the big banks, local media reported.
From a staff of 550 people, the core supervisory team for Credit Suisse was only five people, although this was expanded last year.”
Investors Urge Prison Time for Board of Directors at Credit Suisse
In April it was reported that Credit Suisse investors urged for the board of directors to face prison time after they blocked executive pay plans during the final ever annual meeting.
According to The Guardian, shareholders used most of the nearly five-hour annual general meeting in Zurich – the last in the 167-year-old bank’s history – to voice fury over poor management, hitting out at excessive pay for “incompetent and greedy” bankers who they said took too many risks and endangered Switzerland’s economic prosperity.
In November of 2022, the bank warned investors in a 6-K filing of potential losses due to naked short covering.
Credit Suisse took a massive hit of $4.09 billion in Q3 and hinted at occurring losses in an upturn in markets.
The bank hired 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster and also postponed publication of its annual report earlier this year, per Reuters.
This led clients to withdraw billions of dollars, sending shares on a freefall.
Even after the bank was bailed out, investors continued to pull their money out.
UBS agreed to buy Credit Suisse but sources say 10,000 jobs would have to be cut once the two banks combined.
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