The decision by Basler Kantonalbank to integrate Bank Cler into its own group structure has caused some hefty controversy within the company. And the regional parliament has now pledged to look into the changes as well.
The parliamentary control committee of the city canton of Basel will probe the integration of Bank Cler into Basler Kantonalbank (BKB) to verify whether the move was legally correct in its execution, according to a report in «bzbasel». BKB is owned by the canton.
The situation in August escalated at the bank when the executive committee of Bank Cler (which used to be known as Bank Coop) stepped down in corpore.
State Guarantee for Bank Cler Assets?
The newspaper report raised the question of whether the departure of the executive had left Bank Cler as a shell only, with the specter of the state guarantee for the assets of clients at the heart of the matter. According to the law, the state guarantees for client assets in case of a bank failure, a guarantee that is valid only for BKB and not for its units.
The parliamentary probe will look into the question of whether the structural changes at the bank affected the issue of the state guarantee, according to the report. The committee will also probe issues of compliance, controlling and liability.
The liability regulation stipulates that members of the board and staff implied in the management and audit of the bank – for instance Cler Chairman and BKB CEO Basil Heeb – are personally liable for damage caused by breach of duty.
Law Change or Reversal of Decision?
The finance department of the canton had concluded that the integration had been correctly executed and wasn't in breach of the law. The control committee will look into the case despite this appraisal by state officials.
The probe may eventually lead to a recommendation to adjust the law and extend the state guarantee to cover Bank Cler assets. Or, a far more serious consequence, the state as the owner of the bank will have to force it to reverse the integration process.
