Banking Crisis: Credit Suisse and the Consequences of Years of Mismanagement

Swiss politics recently attributed the failure of Credit Suisse to "years of mismanagement." In a remarkable move, Swiss lawmakers emphasized the role of the authorities who averted a global financial crisis in March 2023 by arranging the sale of the struggling bank to its competitor UBS. This high-profile political investigation, only the fifth of its kind in Swiss history, refrained from blaming the regulators for the failure of one of the country's largest banks. Nevertheless, the Swiss financial supervisory authority Finma was criticized for granting Credit Suisse relief regarding the amount of capital to be held, which it had received through a so-called regulatory filter. Furthermore, the parliamentary committee criticized that Swiss "too big to fail" legislation for banks was too focused on Switzerland, not designed for a crisis of confidence, and neglected important market indicators. A spokesman for UBS, the new owner of Credit Suisse, confirmed in a statement: "The report confirms that the collapse of Credit Suisse was caused by years of strategic errors, mismanagement, and reliance on significant regulatory concessions.