(Bloomberg) -- Switzerland’s banking regulator appointed Stefan Walter to be its new chief executive, as the body seeks greater powers to prevent another banking collapse like last year’s crisis at Credit Suisse.

Walter, 59, will join the Swiss Financial Market Supervisory Authority, or Finma, on April 1, according to a statement on Wednesday. The German national played a key role in building out the European Central Bank’s joint bank supervision from 2014 and also led the unit that oversaw the region’s biggest banks, including Deutsche Bank AG.

The appointment comes at a pivotal time for the Swiss watchdog, with the Credit Suisse debacle in 2023 underscoring its weakness compared to international peers. Subsequent calls for reform have found support in the Swiss government, with Finance Minister Karin Keller-Sutter backing Finma’s own request to be given the power to fine banks. 

“Stefan Walter brings a wealth of experience in financial market supervision,” Finma said in the statement. “His links to international supervisory authorities will be a great asset for Finma’s supervision of the systemically important Swiss banks.”

Credit Suisse suffered a fatal collapse in investor and client confidence from late 2022 that culminated in its emergency takeover by UBS Group AG in March last year. Long-standing mismanagement, including a string of multi billion-dollar losses, accelerated the historic bank’s demise.

Difficult Task

The government is set to publish a report in the spring that is expected to detail which reforms in financial oversight Switzerland will pursue. The new size of UBS, over twice that of the domestic economy, brings a need to recalibrate the country’s approach, Keller-Sutter said in an interview with Bloomberg last week. 

“We have to find solutions, between being more strict maybe, and on the other hand we want to remain competitive,” she said. “So this is quite a difficult task.”

Finma itself, under Chair Marlene Amstad, has argued since the crisis that it should get powers to bring it into line with international standards. That would involve the ability to vet senior managers of the major banks and issue corrective orders, as well as the power to hand down monetary penalties. 

Switzerland has long favored a more consensual approach to financial oversight, and the banking industry has opposed fines on the basis that such a penalty would erode that quality. As it stands, Finma can only take back profits deemed ill-gained and the names of those being sanctioned are almost never disclosed. 

Walter joins after a decade’s experience helping to create a regulator that spans multiple countries. In a 2020 shake-up, he took on a wider role leading a unit that carries out tasks related to all banks under the ECB’s supervision, including benchmarking and industry-wide assessments. 

Some of Walter’s work last year included ensuring banks are developing their processes and provisioning to capture so-called new types of risks such as those related to the environment or geopolitics.

Interim CEO Birgit Rutishauser will remain in charge of day-to-day operations until Walter takes over. The institution was rocked by the resignation of previous chief executive Urban Angehrn in September, who cited the deterioration of his health that the Credit Suisse affair had caused.

Walter holds a Master’s degree in International Banking and Finance from Columbia University, the Swiss government said in a separate statement.

(Updates throughout with more details)

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