It almost sounds as if the appointment of Ralph Hamers as head of Switzerland's largest bank UBS has caused some commotion among European banking regulators. Because now the authority is apparently considering new guidelines for the aptitude test of top bankers. These could also have an impact on Switzerland.

The announcement last December by a court in The Hague that it would seek criminal investigation against the new head of UBS, Ralph Hamers, hit the Swiss financial market like a bombshell. After all, everything had fit perfectly with the appointment of the Dutchman: a young, dynamic banker with a strong track record as a digitizer. What could possibly go wrong?

Well, the presumption of innocence also applies to Hamers, of course. And UBS is undaunted in holding on to him – he denies any wrongdoing.

Check Carefully Before Hiring

The news that the European Banking Authority is considering strengthening aptitude tests for top executives in its territory fits like a glove, however. Two aspects of it stand out in particular: First, the ECB wants to require banks to share candidates' assessments with the supervisor even before the position is filled.

This is intended to prevent someone from taking up their position and then having to be removed again due to a negative suitability assessment by the supervisory authority, as Edouard Fernandez-Bollo, a member of the banking supervisory authority, said at a seminar, according to a report by «FinanzBusiness».

Money Laundering as a Key Factor

And the second aspect of the change also fits the UBS case: for example, the banking supervisory authority wants more rule clarity in case new facts about executives become known – in particular, this concerns findings in the case of money laundering.

As a reminder, Hamer's former employer, ING, had already settled the money laundering case affected by the new investigation in 2018. True, the fine was a record-high 775 million euros. But the settlement also included that ING, as well as its top management, had not committed any criminal acts.

In this respect, the great astonishment of the UBS CEO and board of directors at the court's decision that Hamers would have to prove his innocence once again in public criminal proceedings was understandable.

Will Finma Follow Suit?

Of course, UBS is a Swiss company and as such not primarily subject to ECB supervision. But should the ECB actually tighten its guidelines in the proposed direction, Finma could well follow suit.

Whether the ECB would then have judged the case differently than the responsible UBS recruiting committee is open to speculation. However, this seems possible.

Joint Responsibility for the Appointment of CEOs

Above all, and this is probably the most thought-provoking aspect of the question if one looks at the implication of the envisaged change. With such a change, the ECB would, to a certain extent, assume co-responsibility for the appointment of CEOs of European banks.