Events - 07.02.2013 - 00:00 

Stricter rules for banks

At the HSG on 4 February 2013, Josef Ackermann argued in favour of regulations for the winding-up of system-relevant banks. Market discipline should be incumbent on all banks, said FINMA boss Patrick Raaflaub during the conference.


6 February 2013. About 200 guests had accepted the invitation issued by the Alumni network and the School of Finance (SoF-HSG) of the University of St.Gallen to the first event in the lecture series “Finanzplatz Schweiz”. Specialist lectures took the pulse of Switzerland’s banking and finance industry.

The speakers – Josef Ackermann, Chairman of the Zurich Insurance Group, Patrick Raaflaub, CEO of the Swiss Financial Market Supervisory Authority, Thomas Wiedmer, Alternate Member of the Governing Board of the Swiss National Bank, Raymond J. Bär, Honorary Chairman of Julius Bär Gruppe AG and Pierin Vincenz, President of the Executive Board of Raiffeisen Gruppe elucidated the topic “How big, how complex should banks be?” from various perspectives.

A plea for universal banks
The former CEO of Deutsche Bank, Josef Ackermann, argued in favour of regulations for the winding-up of system-relevant banks. In his lecture, he championed universal banks. According to a report published by the St.Galler Tagblatt (5 February 2012), he was convinced that Switzerland’s good reputation as a financial centre was still intact.

This would make other regulations surplus to requirements. Patrick Raaflaub, the boss of the Swiss Financial Market Supervisory Authority, outlined Switzerland’s course: the first line of defence would be special rules for system-relevant banks, the second line would focus on restructuring and liquidation. He appealed to the banks to exercise more individual responsibility. Market discipline was incumbent on everyone. It would be important for the Swiss restructuring and liquidation strategy to be internationally recognised.

Changing the error culture in the financial industry
New rules, however, would only bite if the error culture changed in the banking and finance industry, a member of the audience pointed out during the first round of questions. This had also proved helpful in the health sector.

Ackermann agreed: executives would have to make sure that errors would be quickly recognised and averted. “The boss of an organisation is responsible for taking the flak, for being accountable for errors and for facing his staff in times of crises.” The Libor scandal was a different matter altogether. Ackermann regarded it as criminal.

“Swiss banking” enjoys a good reputation
According to a report that appeared in Bilanz (5 February 2012), Raymond J. Bär praised the regulator and showed ways into the future of Swiss banking. There was no need to be afraid of the future; Swiss banks play in the top league, particularly if the management of worldwide banks becomes even more difficult in the future.

The speakers agreed that the high double-digit percentages of the return on equity would definitely be a thing of the past and that the financial centre would in future be under greater pressure while competition among banks would have to become fiercer. Nonetheless, it was for this reason, in particular, that they could not be divided up and would have to appear united.

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