The case

After the first part What this toolbox ought to include and the second part on Who will be affected by the wave of regulations?  Prof. Dr Urs Zulauf  comes up with a legislative proposal in the third part on Better governance, at least for SIBs (Systemically Important Banks).

The commentary

Poor corporate governance paired with a high risk culture are said to have contributed to the downfall of CS, and this must not repeat itself, and certainly not with SIBs. Adding a few more rules should help avoid mistakes made in the past.

In April 2024, the Federal Council described various measures as ‘conceivable’.

In the past, many interventions by Finma would have been possible on the basis of the current organisational provisions of the Banking Act. Applying a few simple principles in the law could prove useful, applicable to SIBs, but they could also be amended so that they are applicable for all banks.

One possible option: a mandate to the Board of Directors and the Executive Board in order to ensure good governance and a corporate culture and risk culture – and one would, of course, have to walk the talk.

Further, substantiate the requirements for the members of the Board of Directors as well as their control tasks. Governance and corporate culture should be anchored in the law as a supervisory topic in line with current practice. In special cases, FINMA should also be able to attend meetings of the board of directors and executive management in the role of an observer.