The new director of Finma advocates for increased equity at UBS

New Finma Head Calls for Early Intervention and More Capital in Swiss Financial Sector

In his first public appearance as the new head of the Swiss Financial Market Supervisory Authority (Finma), Stefan Walter spoke out in favor of “earlier options for intervention” in supervision, in addition to more capital. The German citizen appeared at the small banks symposium in Bern’s Stade de Suisse on Tuesday and spoke primarily about the big banks.

Walter announced that he wanted to transform Finma into a “best-in-class supervisory authority”. He emphasized the need for Finma to intervene before the phase of instability to prevent crises like the Credit Suisse rescue in March 2023. Walter also reiterated the demand for increased equity at the UBS parent company level and restrictions on capital distributions and remuneration in times of stress.

However, there is skepticism about the practicality of early intervention strategies. Analysts are cautious about how Walter’s proposals will affect financial institutions like UBS and raise concerns about economic freedom and potential impacts on the financial industry.

In his speech, Walter spent several years as Director General at the European Central Bank (ECB) supervising systemically important banks before moving to Switzerland. He demanded that Finma be given all its supervisory instruments to use in normal operations, just like ECB and supervisory authorities in United States.

It is unclear how Walter plans to implement these changes or what specific actions he will take at Finma to achieve his goal of being a best-in-class institution among financial regulators. However, his vision for Finma aims to improve crisis prevention and make it one of the top regulatory bodies globally.

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