AFP – The International Monetary Fund (IMF) urged Switzerland yesterday to strengthen its financial sector regulation as supervising UBS has become “more challenging” since it grew into a global banking behemoth after its takeover of Credit Suisse.
Switzerland’s biggest bank was strong armed by the government into buying Credit Suisse last year over fears that the second largest lender in the country might go under and spark a global financial crisis.
“Lessons from the CS (Credit Suisse) case should inform further reforms to strengthen the regulatory and supervisory framework,” the IMF said in a statement concluding its annual staff mission to Switzerland.
“The complexity of the combined bank’s global operations also makes supervision more challenging,” the IMF said.
The Washington-based institution noted that UBS is the largest ‘G-SIB’ – global systematically important bank – relative to its home country’s economy.
The IMF said the “powers and resources” of the sector’s supervisor must be increased “to enable early and effective intervention” when necessary.
The Swiss Financial Market Supervisory Authority (FINMA) has also called for increased powers.
