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Switzerland’s financial regulator has appointed outgoing European Central Bank director Stefan Walter as its new chief executive, after its previous head left due to stress following the rescue of Credit Suisse.
Walter, a German national who oversees risk supervision at the ECB, will join Finma from the start of April.
He takes charge at a pivotal time for the regulator, with a raft of changes set to be brought in following the failure of one of the country’s biggest banks in March last year.
Finma’s oversight of Credit Suisse in its final years has come under intense scrutiny within Switzerland, and a government-commissioned report into the failure recommended giving the regulator more powers to intervene in companies. There have also been calls for the regulator to have powers to put sanctions on individuals.
Finma chair Marlene Amstad said Walter’s “knowledge in the area of large bank supervision and his links to international supervisory authorities will be a great asset for Finma’s supervision of the systemically important Swiss banks”. Poor risk controls were a big factor in the fall of Credit Suisse.
Finma is rare among national financial regulators in its inability to fine the companies that it oversees. The watchdog has just 550 staff, compared with the thousands employed by other regulators such as the UK’s Financial Conduct Authority.
In September, Finma announced that Urban Angehrn was stepping down as chief executive, saying that the “high and permanent stress level” of the job “had health consequences” for him.
Finma is being sued by Credit Suisse investors who lost billions of dollars after the regulator signed off a move to wipe out $17bn of bonds as part of the takeover by UBS.
The measure was particularly controversial because shareholders in Credit Suisse retained some value for their equity, an upending of the traditional investor hierarchy even though it was permitted under Swiss law.
In December, Finma itself published an 84-page report into the failure of Credit Suisse.
It found the 167-year-old bank’s downfall was the result of “inadequate implementation of its strategic focus areas, repeated scandals and management errors”.
Thomas Hirschi, head of Finma’s crisis unit and banks division, said at the time that the regulator spotted problems at Credit Suisse early and “used its full range of tools” to try to stabilise the bank.