The financial supervisory authority fills the gap at its operational top with a proven banking expert from abroad. He already stabilized major banks during the financial crisis of 2008.
Stefan Walter will become the new Director of the Swiss Financial Market Supervisory Authority (Finma) as of next April. According to a press release issued by the authority on Wednesday, the Federal Council has confirmed the election of the Finma Board of Directors headed by Marlene Amstad.
The 59-year-old German citizen with long experience in banking regulation and crises has been filling the vacancy at the top of the supervisory board since former director Urban Angehrn resigned from Finma last September for health reasons. Interim director Birgit Rutishauser will remain in charge until the end of March.
Impressive Track Record
Walter brings an impressive track record to his new position. At the European Central Bank (ECB), where he served as Director General since 2014, he helped to establish banking supervision for systemically important banks in the eurozone. From 2020, he was entrusted with the development of the so-called horizontal supervision of banks at the ECB. This covered all risk areas, in particular credit and liquidity risks, as well as the design and execution of stress tests.
Prior to joining the ECB, Walter held the role of Global Bank Regulatory & Supervisory Policy Network Leader at the «Big Four» consulting firm EY for two years. From 2006 to 2011, he served as Secretary General of the Basel Committee on Banking Supervision. In this role, during the global financial crisis, he was tasked with coordinating international negotiations on regulatory reform to strengthen the global financial system.
Connoisseur of Banking
Prior to that, he held various positions at the U.S. Federal Reserve Bank (Fed) of New York for thirteen years, most recently as Senior Vice President. Here, too, he was already responsible for financial stability. The designated Finma director also knows banking through and through from his education: Walter studied in Berkeley, California, and at Columbia University, and holds a master's degree in International Banking & Finance.
On Wednesday, President Amstad also praised his «special knowledge in the field of large-scale banking supervision», as well as his relations with international supervisory authorities. These are «a big plus for Finma's supervisory activities at systemically important Swiss banks».
Under Maximum Pressure
The prospective director will take over Finma during the most challenging moment in its history. In the case of the emergency rescue of Credit Suisse (CS), the supervisory authority left a good impression only to a limited extent and was accused of having waited too long. An appeal is pending before the Federal Administrative Court against the supervisory authority's decision to write off CS's mandatory convertible bonds in the amount of 16 billion Swiss francs in order to secure the sale of the major bank to UBS.
Internally, there have also been further departures in the team after Angehrn's resignation, and President Amstad has become the target of media criticism. Accordingly, Walter must have a stabilizing effect not only on the Swiss banking center, but also on the authorities.
New Tools for New Director
After all, Swiss Finance Minister Karin Keller-Sutter is also demanding more authority for Finma, in particular regarding the instrument of fines. Walter, who has made a career in agencies such as the Fed, would appreciate such an addition to his «toolbox» as a director.
