BERN, March 29 ― The IMF urged Switzerland yesterday to strengthen its monetary sector regulation as supervising UBS has develop into “tougher” because it grew into a worldwide banking behemoth after its takeover of Credit Suisse.
Switzerland’s greatest financial institution was strongarmed by the federal government into shopping for Credit Suisse final yr over fears that the second largest lender within the nation may go beneath and spark a worldwide monetary disaster.
“Lessons from the CS (Credit Suisse) case ought to inform additional reforms to strengthen the regulatory and supervisory framework,” the IMF stated in a press release concluding its annual employees mission to Switzerland.
Like UBS, Credit Suisse was amongst 30 worldwide banks deemed too massive to fail attributable to their significance within the international banking structure.
The merger raised severe considerations in Switzerland round jobs, competitors and the dimensions of the ensuing financial institution relative to the Swiss economic system.
“The complexity of the mixed financial institution’s international operations additionally makes supervision tougher,” the International Monetary Fund stated.
“In the occasion of future disaster, the earlier merger choices might not be possible,” Pelin Berkmen, the top of the IMF delegation, warned at a press convention.
The Washington-based establishment famous that UBS is the biggest “G-SIB” ― international systematically essential financial institution ― relative to its dwelling nation’s economic system.
The IMF stated the “powers and assets” of the Swiss monetary sector’s supervisor have to be elevated “to allow early and efficient intervention” when obligatory.
The G20’s Financial Stability Board, arrange following the 2007-2008 international monetary disaster to steer business reforms, made an identical suggestion in February.
The Swiss Financial Market Supervisory Authority (FINMA) has additionally referred to as for elevated powers to punish unhealthy banks.
UBS purchased Credit Suisse on the discount value of US$3.25 billion (RM15.4 billion).
The financial institution initially reported a internet revenue for 2023 of US$29 billion however it printed a revised determine of US$27.8 billion yesterday after reviewing the fair-value estimate of the deal.
The IMF stated the Swiss economic system “boasts robust fundamentals” and progress is “anticipated to get better step by step this yr” to 1.3 per cent, adopted by 1.4 per cent in 2025.
But it added the nation faces “a number of challenges” together with “mounting spending pressures”, future financing gaps within the pension system and vulnerabilities in the actual property sector. ― eNM
