There are still many unknowns surrounding Credit Suisse, which is why it's important to understand the events. In his first public appearance since becoming CEO of the Swiss Bankers Association, Roman Studer said it's imperative to find out how other countries will judge Switzerland's actions in connection with the bank's failure.

For his first appearance since becoming CEO of the Swiss Bankers Association (SBA) in August, Roman Studer chose the general meeting of the Zurich Bankers Association (ZBV), which represents about 40 percent of member activities in the Swiss financial industry, to lay out his views yesterday evening. 

He was measured in his remarks and didn't focus on bashing Credit Suisse's mismanagement and deficits in risk culture. He rather tried to draw lessons from the experiences of the past months, but also made it clear «There is still a lot we don't know. And that's why we still need a thorough investigation into what happened at Credit Suisse.»

Better Crisis Management

Looking towards Bern, he noted the limited enforcement power of the Swiss Financial Market Supervisory Authority (Finma) and the insufficient cooperation between it and the Swiss National Bank (SNB) in crisis management. He also called for the SNB to have a more comprehensive set of liquidity management tools, such as those of the Federal Reserve, Bank of England, and European Central Bank.

«The interaction, roles, and dealings of Finma and the SNB must be clarified,» Studer stressed, but warned against making hasty populist or short-term decisions or imposing regulations against the backdrop of the various economic policy initiatives and reports in the coming months.

More Power for Finma

«The medicine must not become more dangerous than the disease,» since out of 239 institutions, only had problems. «The rest of the industry is robust and profitable,» he said, although some attendees questioned the statement's veracity.

The discussion turned to the question of how Finma's competence could be increased in light of its inability to issue fines. Studer was skeptical whether that makes sense when a bank is already in trouble. He argues it's more advisable to improve Finma's conditional framework by bringing on better and experienced staff.

Diffuse Responsibilities

At the margins of the event, there was criticism that Finma was shooting itself in the foot with smaller banks, while not being in a position to deal with the large banks on an equal footing.

The variable compensation systems of the banks aren't the problem per se, even at Credit Suisse where it was primarily diffuse responsibilities and a lack of consequences for misconduct that led to difficulties. Accordingly, he called for Swiss regulation to close such gaps and to evaluate accountability.

International View

Looking beyond the October 22 elections, Studer emphasized the relevance of the reports from the Financial Stability Board (FSB) scheduled for the end of the year and in the first quarter of next. The FSB is an international body that monitors and makes recommendations on the global financial system.

These publications will give first impressions of how other countries assess Switzerland's actions in the events related to Credit Suisse.