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? as well as the third part Better governance, at least for SIBs, and the forth part Bonus rules? – at least with regard to systemically important banks (SIBs), Prof. Dr Urs Zulauf has come up with his proposal in the fifth part on a Senior Managers’ Regime.

Source: Urs Zulauf (German) – worth reading

The commentary

Ever since the financial crisis, there have been calls for more proceedings against bank managers. Not surprisingly, implementing such proceedings has proved to be difficult as those affected have been putting up fierce legal resistance and the proceedings have been placing growing demands on the courts due to the fact that responsibilities in the banks are not always clearly defined.

The legal systems of various countries have responded to these challenges with various approaches. Some countries have introduced a special liability regime for bank managers; in Switzerland FINMA has managed the situation quite successfully so far by conducting in-depth investigations, initiating proceedings against individuals and enforcing a liability regime against individual banks. Still, it is to be expected that a new liability regime will have to be introduced, which should be as simple and proportionate as possible with the identification of the most important risk functions and the most important risk carriers as well as a few rules of conduct as core elements.

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