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Everyone in the “Arena” agreed who was to blame for the misery: the former CS management. However, when it came to the question of whether more banking regulations were needed, the economists and politicians gave nothing.
Credit Suisse relies on the support of the Swiss National Bank (SNB). After the shares of the second largest Swiss bank reached a historic low on Wednesday, the SNB lent CS up to 50 billion francs. Even if this initially helped to calm the situation, the situation at Credit Suisse remains critical.
In the “Arena”, the guests agreed that the SNB reacted correctly with the cash injection. Meanwhile, the question of what lessons can be learned from current events for the banking system was hotly debated.
SP National Councilor Céline Widmer called for more regulation. After the banking crisis in 2008, new rules were introduced to prevent exactly what is now happening at CS. It is now becoming apparent that the supervisory mechanisms are not working and that state intervention is still needed.
The banks’ bonus system leads to false incentives.
And: “While people always wanted to save when supporting social institutions such as daycare centers, the SNB speaks billions for the banking system.” That is difficult to explain. CS should therefore not be rescued by the state without consideration. Finally, Widmer called for stricter controls and more effective instruments for the financial market supervisory authority (Finma) in order to be able to sanction such intolerable behavior by banks with fines.
SVP National Councilor Thomas Matter contradicted: “So far this has not been a state rescue, taxpayers have not had to pay a cent.” The SNB has the task of stabilizing the financial system. It is not uncommon for a central bank to make money available to a bank temporarily. In addition, CS would also have to repay the loan – including interest.
When a bank is no longer trusted, customers run away and without customers there is no bank.
Therefore, it is not appropriate to stir up fear. Matter identified the main problem with trust: “If a bank no longer has trust, customers will run away and without customers there is no bank.”
“If a baker has a problem, the bank withdraws his loan. But if a big bank has a problem, it gets money, because otherwise the whole economy suffers,” said Daniel Lampart, chief economist at the Swiss Confederation of Trade Unions.
The CS bosses would now have to take on their responsibilities. “They bungled, took risks they couldn’t control and made insane amounts of money doing it.” Lampart denounced the widespread bonus system in the banking center as a basic problem. This creates a “self-service mentality”.
Klaus Wellershoff, former chief economist at UBS and Schweizer Bankverein, did not accept this argument and declared, loosely based on the ancient philosopher Solon: “We are all a bit greedy.” But wanting to change the bonus system is exaggerated.
“Banking crises are not something that can be regulated away,” says Wellershoff. We know from experience that markets depend on larger factors. The current uncertainty is a consequence of the American banking crisis, which in turn was triggered by the rise in interest rates against the background of inflation.
In addition, the financial market supervisory authority already has suitable instruments to intervene. Wellershoff said: “I strongly question the effectiveness of fines that are aimed at the institutions and not at the people responsible.”
The question of whether the Swiss banking center should be regulated more closely after the current events will probably also continue to be a topic of discussion in Parliament. A number of requests are currently pending in this regard.