BERN (Reuters) – The fall of Credit Suisse can be explained by poor management of the bank for years, an investigative committee of the Swiss Parliament said on Friday, which also criticized the Swiss federal financial market supervisory authority (FINMA) while recognizing that the authorities have avoided a global financial crisis.

In June 2023, the Swiss Parliament took the unusual initiative of creating a parliamentary commission of inquiry (CEP) on the sidelines of the takeover of the Swiss bank by its counterpart UBS, following its collapse. The CEP published a long-awaited 569-page report on Friday as well as nine expert reports.

“The board of directors and management of Credit Suisse in recent years are responsible for the loss of confidence in the bank and the difficulties it has encountered, which have increased to the point of jeopardizing the existence even from the company in March 2023,” the investigation concluded, according to a press release accompanying the report.

While the CEP sees no causal wrongdoing on the part of the authorities in the Credit Suisse crisis, even believing that they avoided an international financial crisis, it criticized the lack of transparency during the months of crisis meetings between the officials of the Ministry of Finance as well as FINMA.

The CEP criticized FINMA in particular for having granted Credit Suisse extensive capital relief in the form of a regulatory filter and for the “partial ineffectiveness of the latter’s supervisory activity”.

The Federal Council is also criticized for having been “too hesitant”, particularly in the development of the ‘too big to fail’ regulations.

NON-MEETINGS

Additionally, officials had been discussing the potential collapse of Credit Suisse for months, but many of their discussions were ad hoc and lacked transparency.

The investigation notably raised questions about how former Finance Minister Ueli Maurer shared information about the bank with his successor, Karin Keller-Sutter, who took office in 2023.

Seeking to reassure markets, Ueli Maurer publicly supported Credit Suisse in December 2022, telling Swiss television: “Just leave them alone for a year or two.”

But as he prepared to hand over the reins to Karin Keller-Sutter, he failed to warn her enough, telling her around Christmas that the bank was in a stable situation, according to the report.

“The CEP comes to the conclusion that the transfer of the Credit Suisse file did not take place in an ideal manner. There was no file transfer.”

(written by Dave Graham and Ariane Luthi; Bertrand De Meyer,)

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