Dec 30, 2023
Swiss Bonuses Should be Tied to Bank Performance, Watchdog Says
Bloomberg News
,![A Swiss national flag flies from the shores of Lake Geneva, also known as Lac Leman, as a ferry boat passes in Geneva, Switzerland, on Tuesday, May 14, 2019. While the Swiss city has largely recovered from the end of secrecy at financial institutions, which shrank the number of banks there by a quarter since 2005, it faces questions about its allure for international businesses and the world’s wealthy. Photographer: Stefan Wermuth/Bloomberg, Bloomberg A Swiss national flag flies from the shores of Lake Geneva, also known as Lac Leman, as a ferry boat passes in Geneva, Switzerland, on Tuesday, May 14, 2019. While the Swiss city has largely recovered from the end of secrecy at financial institutions, which shrank the number of banks there by a quarter since 2005, it faces questions about its allure for international businesses and the world’s wealthy. Photographer: Stefan Wermuth/Bloomberg](/polopoly_fs/1.2016468.1703933250!/fileimage/httpImage/image.jpg_gen/derivatives/landscape_620/a-swiss-national-flag-flies-from-the-shores-of-lake-geneva-also-known-as-lac-leman-as-a-ferry-boat-passes-in-geneva-switzerland-on-tuesday-may-14-2019-while-the-swiss-city-has-largely-recovered-from-the-end-of-secrecy-at-financial-institutions-which-shrank-the-number-of-banks-there-by-a-quarter-since-2005-it-faces-questions-about-its-allure-for-international-businesses-and-the-world-s-wealthy-photographer-stefan-wermuth-bloomberg.jpg)
(Bloomberg) -- Switzerland’s financial watchdog wants to make bankers’ bonus payments more dependent on the business performance and long-term risk-bearing capacity of their employers.
Marlene Amstad, president of the Swiss Financial Markets Authority, would like the agency to have a say in banks’ remuneration models, she said in an interview with Schweiz am Wochenende.
“The Credit Suisse case shows that for decades the bank had incurred losses and at the same time, paid out high bonuses,” she said. “We therefore need a better legal basis so that Finma can intervene earlier and more systematically.”
Read more: Swiss Watchdog Finma Seeks Powers to Prevent Future Crises
Finma in 2022 made a request to the State Secretariat for International Financial Matters, asking that hurdles to withdrawing the guarantee from a banker or person in charge be removed. Before a breach of supervisory law occurs, the bank must record in writing who is responsible for which area.
“This not only reduces the time and effort required to provide evidence to hold bosses responsible after an accident, but also has a preventative effect,” Amstad said. She also said the regulatory body should communicate more aggressively and earlier in the future.
©2023 Bloomberg L.P.