Parliament, the investigation committee and the reports of the authorities

The extraordinary session of April 2023

The Federal Assembly had no part in the decisions of the weekend. Its Finance Delegation, a joint body of members of both chambers, approved the guarantee credits in advance under the urgency procedure, as the ordinance required. The two chambers could only deal with the matter afterwards, at an extraordinary session convened for 11 and 12 April 2023. The Council of States approved the commitment credits of 109 billion francs, attaching demands for reforms of banking law, an analysis of capital requirements and restrictions on bonuses. The National Council rejected the credits twice, by an unusual alliance of the Social Democrats, the Greens and the Swiss People’s Party. The left doubted that the promised reforms would materialise, while the right objected to state guarantees for a private bank as a matter of principle.¹ Because the two chambers failed to agree, the credits were formally refused.

The refusal had no legal effect on the commitments already entered into. The Federal Council stated on 19 April 2023 that Parliament had debated the credits on the premise that a rejection would not affect the Confederation’s emergency commitments to the SNB and UBS, and that it shared this legal opinion. It promised to give the fullest consideration to Parliament’s position in its future work.² The episode exposed a structural weakness of Swiss emergency law. The Finance Delegation can commit the Confederation to amounts that exceed the annual federal budget several times over, while the plenary chambers can only register their disapproval after the fact. The National Council’s vote was therefore a political statement. It expressed the unease of a broad part of the population with a solution that had been presented as the only possible one and that concentrated the country’s international banking business in a single institution.

The Federal Council also moved to give the measures a basis in ordinary law. On 6 September 2023 it adopted a dispatch to Parliament for transferring the relevant provisions of the emergency ordinance into federal law, and on the same day it repealed Article 6 paragraph 3 of the ordinance.³ By then the guarantees themselves had already ended, as described below. The broader legislative reform of the too-big-to-fail regime, including the permanent public liquidity backstop, was prepared through a separate process that is the subject of the following chapter.

The parliamentary investigation committee

On 8 June 2023 the Federal Assembly established a parliamentary investigation committee (Parlamentarische Untersuchungskommission, PUK) to examine the conduct of the Federal Council, the federal administration and the other bodies entrusted with federal tasks in connection with the emergency merger. Such committees are the strongest instrument of parliamentary oversight in Switzerland, and only a handful had been set up in the history of the federal state. The committee was chaired by Isabelle Chassot, a member of the Council of States for the Centre party from Fribourg. It held 45 meetings, heard 79 persons and analysed more than 30,000 pages of documents before it published its report on 20 December 2024.⁴ The report itself is dated 17 December 2024.⁵

The committee’s central finding placed the responsibility for the collapse on Credit Suisse itself. The management and the board of directors of the bank were responsible for the loss of confidence and for the crisis that became existential in March 2023. The committee found no misconduct of the authorities that had caused the collapse. Its assessment of the authorities was nevertheless critical in several respects. FINMA had supervised Credit Suisse actively, but its interventions had achieved little. The committee questioned the effectiveness of repeated letters and assessments and recommended greater use of formal orders. It criticised the regulatory filter of 2017 as an extensive interpretation of the law that had masked the true capital position of the parent bank. Without these reliefs, according to the committee, Credit Suisse would not have met the regulatory requirements in 2021 and 2022, and sharper sanctions would have been warranted.⁶

The committee also examined the development of the too-big-to-fail regime since 2011. It found that the regulation had advanced until 2015 and had then stalled. Other major financial centres had introduced a public liquidity backstop after the recommendations of the Financial Stability Board of 2016, while Switzerland had begun work on one only in the spring of 2022. The Federal Department of Finance and the Federal Council had accommodated the major banks’ concerns about competitiveness, and the Federal Council’s evaluation reports on the regime between 2015 and 2021 had been too summary, lacking strategic engagement and international comparison. On the crisis management of March 2023 itself, the committee’s judgment was favourable. The Federal Council and the SNB had acted effectively and prevented international contagion. Coordination in the autumn of 2022 had been inadequate, however, and the Federal Council as a collegial body had been insufficiently informed by the head of the finance department.⁷

The committee addressed twenty recommendations to the Federal Council and tabled six postulates, four motions and one parliamentary initiative. Its recommendations concerned the use of formal supervisory orders, the coordination between FINMA and the Federal Audit Oversight Authority in the audit of systemically important banks, crisis preparedness with international coordination, written documentation of the Federal Council’s information on threats to financial stability, and a regulatory regime for UBS that takes account of its size.⁸ The Federal Council welcomed the report on the day of its publication. It noted that the committee acknowledged positively the actions of the authorities and the choice of the takeover, and that its findings largely confirmed the measures proposed in the Federal Council’s own report on banking stability of 10 April 2024.⁹

The assessments of FINMA and the Federal Council

The authorities had published their own analyses before the committee reported. FINMA’s report “Lessons Learned from the CS Crisis” of 19 December 2023 described an intensive supervisory relationship over many years. In the years 2018 to 2022 alone FINMA had carried out 108 on-site reviews and identified 382 points requiring action, 113 of them classified as high or critical risk. It had also conducted 43 preliminary investigations, issued nine reprimands, completed eleven enforcement proceedings against the institution and filed sixteen criminal complaints. FINMA concluded that it had exhausted its options and powers but that the legal framework had been insufficient. It asked for a senior managers regime, the power to impose fines, stricter rules on corporate governance and stronger instruments to enforce recovery and resolution planning.¹⁰ The claim that FINMA had done all it could was received with some scepticism, not least because the parliamentary committee later questioned whether the supervisor had used the powers it had.

A group of experts on banking stability, set up by the Federal Department of Finance, delivered its report on 1 September 2023.¹¹ The Federal Council’s report on banking stability followed on 10 April 2024.¹² It proposed a comprehensive package of measures to strengthen capital, liquidity, supervision and resolution. Its content and the subsequent legislative work are treated in the following chapter. For present purposes it is enough to note that the Federal Council, the SNB, FINMA and the parliamentary committee converged in one essential diagnosis: the collapse had resulted from the failure of one bank’s management, while revealing gaps in a regime that had been considered among the most advanced in the world.

Notes

1. swissinfo.ch, “Credit Suisse bailout: Swiss parliament complains in vain”, April 2023, https://www.swissinfo.ch/eng/business/credit-suisse-bailout-swiss-parliament-complains-in-vain/48433824. The article quotes Keller-Sutter’s remark that the authorities had been “dealing with a patient who had already contracted a chronic disease”. ↩
2. Federal Council, “Federal Council discusses outcome of extraordinary session”, media release of 19 April 2023, https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-94415.html. ↩
3. Federal Department of Finance, “FAQ Credit Suisse” (cited above), chronology. ↩
4. PUK report, summary (cited above), introduction; Watson, 20 December 2024 (cited above). ↩
5. Federal Department of Finance, “UBS takeover of Credit Suisse” (cited above), which gives this date for the committee’s report. ↩
6. Watson, 20 December 2024 (cited above), on responsibility, the capital reliefs and sanctions; PUK report, summary (cited above), section on FINMA, on the effectiveness of supervisory instruments and the regulatory filter. ↩
7. PUK report, summary (cited above), section on the too-big-to-fail regime; Watson, 20 December 2024 (cited above). ↩
8. Watson, 20 December 2024 (cited above), for the numbers of recommendations and parliamentary instruments; PUK report, summary (cited above), recommendations. ↩
9. Federal Council, “Bericht der Parlamentarischen Untersuchungskommission zur Credit Suisse: Der Bundesrat nimmt Stellung”, media release of 20 December 2024, https://www.admin.ch/gov/de/start/dokumentation/medienmitteilungen/bundesrat.msg-id-103689.html. ↩
10. FINMA, press release of 19 December 2023 (cited above), section on new powers. ↩
11. Federal Department of Finance, “FAQ Credit Suisse” (cited above), chronology. ↩
12. Federal Council, media release of 20 December 2024 (cited above), which refers to the report on banking stability of 10 April 2024. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.