The Finma regulates too much and without legitimacy

The Federation of Swiss Cantonal Banks (VSKB) comes up against the flow of regulations imposed on banks by Finma. (Image: Ruben Sprich / Reuters)

The 24 cantonal banks, unlike other banks, contributed to the stability of the financial system during the last financial crisis. According to a study by the BAK Economics Institute for Economic Research, they now generate gross value added (income less intermediate consumption) of about 5 billion francs, or just under 1% of economic value. in Switzerland.

Although the cantonal institutions are well capitalized on other banking groups and they also work more efficiently, it is not just joy. The Association of Swiss Cantonal Banks (VSKB) is faced with a flood of regulations which, in its view, are expensive and particularly affect small banks. The Association hopes to remedy this situation by clarifying the principle of proportionality of regulators, with the two parameters of size risk (total balance sheet) and strength (capital endowment) in the foreground.

More precisely, VSKB criticizes Finma. The Association strongly believes that the regulator is endangering its legal framework and extensively interpreting its regulatory mandate without sufficient legitimacy. The association is particularly critical of the circulars with which Finma specifies its supervision practice. Although they are not legally binding and only interpret the legal bases, they are in fact of a normative nature – banks are under pressure to obey them. For example, Finma has regulated circulars in areas such as compensation, asset management or corporate governance. From Finma's point of view, however, it is the banks themselves who seek clarity and want to know how to apply the laws. If there were no circulars, it would be necessary to invent them according to this logic.