Greater responsibility for bank top management (cross-border guide)

Context

In a nutshell

• The Federal Council is consulting on new measures to increase the accountability of bank executives.
• Banks with more than 250 employees must establish in a document who is responsible for adopting individual decisions.

Increased responsibilities for bank executives

The Swiss Federal Council has announced a public consultation to introduce new measures to increase the accountability of bank executives. Under the new rules, banks with more than 250 employees will be required to set out in a document who is responsible for making decisions relating to financial matters.

This change was motivated by the need to increase transparency and accountability to shareholders and customers. The new rules will apply to all banks that have more than 250 employees and operate in Switzerland. This means that banks such as UBS and Credit Suisse, which have more than 50,000 employees, will be subject to these new rules.

Banks will need to determine who is responsible for making decisions related to financial matters, such as risk management and compliance with financial regulations. This also includes the responsibility to ensure that decisions are made in a transparent and accountable manner.

According to the Federal Council, these new rules will apply from 2025. Banks that do not comply with these rules will be able to

Operational details

Key facts

• The new measures are part of the package of so-called "too big to fail" regulations.
• FINMA will have greater supervisory and sanctioning powers.
• Banks will have to adopt principles to avoid false incentives in salaries.

Increased responsibilities for bank executives

Switzerland is moving to strengthen banking regulation, particularly for large banks. These new measures are part of the package of so-called “too big to fail” regulation, which provides greater supervisory and sanctioning powers for FINMA, the Swiss banking regulator.

FINMA will have greater supervisory and sanctioning powers to ensure the stability of the Swiss financial system. In this context, the Zurich-based bank UBS will receive more attention. According to a statement from the bank itself, "the new regulation will allow FINMA to take more effective measures to prevent the concentration of risk and ensure the stability of the financial system".

Banks will need to adopt principles to avoid false incentives in pay, such as the practice of allocating bonuses and stock options to encourage employees to make risky decisions. This type of practice can lead to risky behavior on the part of employees, which can jeopardize the stability of the financial system.

Here are some concrete examples of how these

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Key points

Increased responsibilities for bank executives

The new measures introduced by the Federal Council could have a significant impact on the governance of Swiss banks. It is important to monitor how banks will adapt to these new demands and how regulatory authorities will let things play out.

The Federal Council has announced that it has taken new measures to increase the transparency and accountability of bank executives. Among these, the request that Swiss banks must take into account Corporate Governance criteria, such as the separation between the role of director and manager, and the obligation to inform the Board of Directors and the Board of Auditors about the risks and opportunities of the company.

The new regulation, which came into force on 1 January 2023, requires banks to adopt more transparent and accountable governance, with the aim of increasing customer confidence and reducing risks to the economy. According to data from the Statistics Office, Swiss banks have already started implementing these new measures, with the aim of increasing the transparency and accountability of bank executives.

It is important to note that these new measures are not only an adaptation to new regulations, but also an opportunity for Swiss banks to improve their governance and increase customer confidence. Some banks, such as UBS and Credit Suisse, have

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Source: rsi.ch