Audit Ordered into Credit Suisse’s Demise

ZURICH (Reuters) – Swiss financial market regulator FINMA has initiated an audit concerning Credit Suisse’s handling of events leading to its collapse in 2023, as reported by the Swiss newspaper SonntagsZeitung on Sunday.

According to the publication, FINMA is examining the 15 months before the state-orchestrated merger with its rival UBS in March. To conduct this audit, nearly a dozen employees from both banks have been interviewed.

The audit, aimed at assessing crisis management at Credit Suisse, has been commissioned to the law firm Wenger Plattner, which conducted these interviews. This appointment was preceded by a “secret” order from FINMA in September 2023, indicating its intent to review how the bank managed the crisis. The interviews are intended to determine whether the authorities were misled by Credit Suisse’s management at the time.

FINMA, the Swiss finance ministry, and the Swiss National Bank have not responded to requests for comments from Reuters. Wenger Plattner and UBS have also refrained from commenting.

The investigation is focusing on key issues, including:
– When it became evident that Credit Suisse could not be saved
– The bank’s liquidity status
– The condition of its equity
– The general performance of its management

A report released in December by FINMA indicated that Credit Suisse was on the verge of collapse months before the takeover and advocated for enhanced regulation powers over banks.

Additionally, a Swiss parliamentary committee examining the authorities’ response to Credit Suisse’s failure is expected to produce its report later this year. In April, Swiss authorities proposed measures, including stricter capital requirements for UBS, to prevent a similar situation from occurring. The parliamentary proposals are expected to be debated following the committee’s report.

Critics of the takeover have contended that Swiss authorities could have sustained Credit Suisse as an independent entity but were slow in their actions and failed to provide adequate assurances of the bank’s viability. Conversely, authorities have defended their response, attributing the bank’s collapse to its internal failures.