With the rescue of Credit Suisse and loss of billions of francs in currency reserves, 2023 was an exceptional year for the National Bank. However, there was no stress-related bonus for Chairman Thomas Jordan.
The crisis at Credit Suisse (CS) highlighted weaknesses in the regulatory framework. This was the conclusion reached by the Swiss National Bank (SNB) in its annual report for 2023.
One year ago, the SNB supported the sale of CS to UBS by granting liquidity assistance amounting to billions of francs. The national bank had fulfilled its role of «Lender of Last Resort» in the acute crisis, the monetary authority reflected on Tuesday.
Ongoing Debate
The bank’s findings state that «the package of measures was crucial in managing the acute crisis at Credit Suisse and thus in avoiding a financial crisis which would have had serious economic consequences for Switzerland and other countries.»
When looking back, however, the National Bank, has reached the conclusion that the resilience of banks and their resolvability in a crisis must be strengthened. In this context, the current «Too Big To Fail» regulations must be reviewed to ensure that they take into account the controlled resolution of systematically important banks. On March 19, 2023, the federal government and supervisory authority decided that CS should be rescued by way of sale, and not by way of the restructuring intended under «Too Big To Fail».
Early Intervention
In particular, the National Bank recognizes a need for action in the areas of early intervention, capital and liquidity requirements, and resolution planning. According to its own statements, it is participating at both national and international levels in the ongoing debate about regulatory adjustments. These kinds of discussions are currently ongoing at the level of the Financial Stability Board (FSB) and the federal government; in April, the evaluation of an expert group appointed by the Federal Council is to be released.
In 2023, the SNB suffered a loss of 3.2 billion francs. This makes it impossible for the bank to transfer funds to the federal government and cantons for the second year running. However, the SNB was able to raise its own reserves.
Massive Pay Increase for Vice-President
Chairman of the National Bank, Thomas Jordan, who will step down from his position in the autumn, had to make do with less money. He brought home a considerable 54,000 francs less than in the previous year, but still reached a total remuneration figure of 982,000 francs. On the other hand, newly appointed vice chairman, Martin Schlegel, made more than half a million francs more, drawing level with Jordan’s total salary.
Many observers see Schlegel as the logical choice from within the bank for Jordan’s successor at the top of SNB.
