BERNE/ZURICH (Reuters) – “Solid reforms of the Swiss financial sector” are necessary after the takeover of Credit Suisse by UBS, the International Monetary Fund (IMF) said on Thursday.
“The state-facilitated acquisition of Credit Suisse by UBS has stabilized financial markets, but the experience and prospects also call for solid reforms of the financial sector,” underlines the international organization in its assessment of the Swiss economy.
The IMF further notes that regulating the new UBS will be “difficult” for Swiss authorities given the size, complexity and global presence of the banking group.
“It is a challenge and it requires additional decisions and changes (…) in terms of capital and liquidity requirements,” underlines Pelin Berkmen, head of the IMF delegation in Switzerland.
For Pelin Berkmen, the recommendations made in 2019 by the IMF are still valid. These recommend, among other things, increased power for Finma, the Swiss financial markets authority, including the ability to impose fines on bank executives.
“We continue to believe that our recommendations are relevant and we hope that in the future the Credit Suisse case will provide lessons on what needs to be changed from the authorities’ perspective,” she said. during a press conference in Bern.
The IMF’s warning comes after that issued in mid-March by the Organization for Economic Co-operation and Development (OECD), which noted that the takeover of Credit Suisse by UBS had created “new risks and new challenges” for the Swiss economy.
Switzerland’s Financial Stability Board, which brings together central bankers, Treasury officials and G20 regulators, for its part highlighted the risk of a UBS bankruptcy on the Swiss economy and urged Berne to strengthen its controls on the banks.
The IMF is expected to carry out a more in-depth analysis of the Swiss financial sector later this year and publish its report in early 2025.
The Swiss government is also expected to present its own proposals on banking regulations in April.
(Reporting John Revill; Claude Chendjou, edited by Sophie Louet)
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