In the wake of Credit Suisse's takeover, financial regulators have been accused of lacking bite. Still, the Swiss financial regulator the authority conducted more investigations in 2022 than the year before.
The Swiss Financial Market Supervisory Authority (Finma) released its annual report for 2022 on Tuesday but did so without its traditional press conference, which it postponed to an unspecified date.
In a year marked by extraordinary geopolitical tensions resulting in sanctions against Russian bank clients and economic upheaval, the supervisory authority was confronted with many risks. It was busier last year than the year before.
More Investigations
Last year Finma conducted over 850 investigations while concluding 39 proceedings against companies and individuals, compared to 763 clarifications and 34 proceedings in 2021. At the same time, administrative assistance to foreign authorities declined, falling from 333 to 276 completed requests.
It also focused its attention on individuals with completed investigations jumping to 50 from 7 the previous year. However, the number of completed enforcement proceedings in the authorized area dropped from to 10 from 11 cases.
Spygate Suspects Jumped
Two unnamed individuals in the «Spygate» affair involving employees at Credit Suisse were able to get off the hook, with enforcement proceedings initiated against them in the fall of 2021 dropped after they agreed to cease further activity in the financial sector.
In recent days, the Finma leadership publicly called for even more authority in the enforcement area. Finma chair Marlene Amstad called for permission for Finma to hand out fines and impose punitive measures on managers who run afoul of regulations. And Director Urban Angehrn complained the hurdles to punishing individuals are very high.
Enforcement Costs Money
The watchdog already does work for free. New legal tasks and their increasing complexity increase the requirements for the supervision activity and lead to higher expenditures.
This is likely related to on-site inspections at banks which increased to 113 from 95 in the previous year, although visits to UBS and Credit Suisse declined. In connection with the Credit Suisse rescue, Finma management said it was in very close contact with the institution over the past months.
Expanded Staff
After having been stable for a long time, Finma's operating costs have risen in the previous two years due to the expenses associated with the coming into force of Fidleg and Finig financial directives. This trend continued in 2022 as operating expenses increased by seven million Swiss francs to 133 million francs.
In light of the additional tasks and increased requirements for supervisory activities, more staff was required. The number of full-time positions at the authority averaged 539 in 2022, compared with 519 the previous year.
