Introduction
The Swiss financial market supervisor, FINMA, has expressed its approval of the government's recent proposals aimed at enhancing its regulatory powers over the financial industry.Context
Announced on June 6, these proposals include the establishment of a senior managers regime designed to hold executives accountable for their actions by allowing for the clawback of bonuses in cases of misconduct. Additionally, FINMA would gain the authority to impose fines on institutions that violate regulations.Developments
FINMA stated that it welcomes the introduction of various preventive and disciplinary measures, emphasizing their potential to incentivize compliance among supervised institutions. The proposals are expected to significantly reduce the likelihood of crises in the Swiss banking sector.Following the collapse of Credit Suisse in 2023, FINMA has faced criticism regarding its regulatory effectiveness and has been advocating for stronger powers. The organization also welcomed the government’s initiative to require banks to enhance their recovery and resolution planning. FINMA highlighted that the expansion of available crisis instruments would enable it to mandate corrective actions for deficiencies in recovery planning.