With money-laundering, market-rigging and tax evasion scandals, the list of errant Swiss bankers has grown in recent years. A Swiss court has put a halt to a list of bankers who have flunked the «honesty test».
Swiss banking has gone from scandal to scandal in recent years, keeping the country's financial regulator, Finma, extremely busy.
The industry has paid billions to settle criminal charges in the U.S. that it helped wealthy Americans hide their money from taxes, banks have paid fines for manipulating everything from the benchmark interest rates to precious metals and foreign currencies, and money-laundering scandals such as FIFA, Brazil's Petrobras and Malaysian 1MDB have sullied Switzerland's reputation.
Led by former UBS banker Mark Branson, Bern-based Finma has made wider use of its powers in recent years and increasingly named and shamed bankers too – a departure in what was until conducted behind closed doors.
Surveillance Scandal
Now, Switzerland's highest court has put a stop to one instrument in Branson's artillery: a so-called watchlist of errant bankers who not longer meet fitness and propriety standards laid out by Finma.
The banker behind the court appeal, who wasn't named, appeared on Finma's radar when the regulator was probing manipulation of Libor rates. The banker's file calls him «the highest-ranking person demonstrated to be involved in manipulating rates. UBS terminated his employment.»
The regulator views the database as a sort of institutional memory, but it also revisits unpleasant memories of the a decades-old spying scandal in Switzerland, where authorities kept elaborate files on those deemed politically undesirable to the country.
Effectively Banned
The UBS banker, who successfully fought to have his file removed from the watchlist, had argued that his file was erroneous and translated to a professional ban without a formal investigation. The ruling, which overturns a lower court ruling, cannot be appealed.
Finma said it would analyze the written judgement before commenting further. The regulator won a minor victory in the case: the court acknowledged the legal grounds to maintain a watchlist of Swiss bankers.
Bern only recently began publishing its enforcement statistics two years ago: last year, the number of enforcement cases rose nearly 6 percent to 1,358. The regulator's report for 2016, which included major money-laundering scandals such as 1MDB, is expected early next month.
