FINMA president: 'Forced silence harms the financial center'

Marlene Amstad, president of the Swiss Financial Market Supervisory Authority (FINMA), is pushing for new powers that she believes will strengthen Switzerland's financial center by enabling more transparent enforcement against errant institutions. Amstad argues that the current limitations on communication surrounding FINMA's proceedings undermine trust in the Swiss financial market.

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It sends no good signal to the customers of the financial center when we are not allowed to communicate which bank or insurance company has seriously violated the applicable rules.

"It sends no good signal to the customers of the financial center when we are not allowed to communicate which bank or insurance company has seriously violated the applicable rules," Amstad stated. She highlighted that FINMA concludes an average of 40 enforcement proceedings annually, but is only permitted to publicly disclose information on about 5 percent of these cases. In contrast, other major financial centers report transparency rates between 95 and 100 percent.

Amstad emphasized that these are not trivial matters, noting that one-third of the proceedings involve money laundering, human trafficking, and terror financing – activities that the Swiss financial center wishes to distance itself from. The "forced silence" surrounding these cases, she contends, erodes confidence and harms the competitiveness of the financial hub. She is advocating for legal frameworks similar to those in place in other leading financial markets.

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This forced silence undermines confidence in the Swiss financial center.

While acknowledging that the Credit Suisse collapse three years ago is still a subject of debate, Amstad countered criticisms from UBS CEO Sergio Ermotti, who suggested regulatory leniency contributed to the bank's downfall. Amstad asserted that in her extensive experience in the financial market, she has rarely, if ever, seen a banking crisis where the primary responsibility was not attributed to the management and board of the failing institution.

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I have rarely, if ever, seen a banking crisis where the primary responsibility was not attributed to the management and board of the failing institution.

Amstad's focus is not on increasing regulation but on imposing sharper consequences for the few institutions that exhibit recalcitrant behavior when serious rule violations occur. She believes that empowering FINMA with greater transparency will ultimately benefit the financial sector by ensuring accountability and reinforcing its integrity on the global stage.

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It is not about more regulation, but about sharper consequences for the few institutions that behave recalcitrantly in cases of serious rule violations.