Swiss Regulator to Get Power to Fine Banks Under Law Proposal

This content was published on June 6, 2025 - 15:00

2 minutes

(Bloomberg) — Switzerland wants to give its financial watchdog the ability to fine banks, potentially boosting Finma’s enforcement powers after it failed to prevent Credit Suisse’s collapse.

The proposed changes, published by the government on Friday, would enable Finma to fine legal entities, and the decisions could be made public. The reform would stop short of giving the agency the power to fine individuals.

Still, it would require lenders to compile documents identifying the executives responsible for important decisions. This would be designed to enable Finma to assign individual blame in case it subsequently finds misconduct, and potentially force the involved executives to pay back some of their bonuses.

Finma, led by Chief Executive Officer Stefan Walter since April last year, has long lacked some of the powers enjoyed by global peers, including the ability to hand down financial penalties. Walter has spent his first year in charge of the body calling for more tools to oversee the sector amid a broad regulatory revamp.

The regulator has faced sharp criticism for its oversight of Credit Suisse, including its decision over a decade ago to grant the bank relief from capital requirements.

The Finma reform proposals unveiled by the Swiss government on Friday were part of a larger package that also seeks to introduce higher capital requirements for UBS Group AG, in a bid to reflect its increased size after it bought Credit Suisse. All of the proposals will go through lengthy legislative procedures and may change before they take effect.

Swiss Finance Minister Karin Keller-Sutter has previously said she’s in favor of giving the regulator the power to fine financial institutions.