Where oh where are the bankers who loudly boast about the superiority of Switzerland's financial center? The takeover of Credit Suisse by UBS not only left the banking market in turmoil, but there is also talk of tremors, catastrophe, and a new «monster bank.»

Even politicians and high-ranking officials are exercising unusually clear self-criticism and calling for a shake-up.

Watchdog With no Bite

Marlene Amstad, chair of the Swiss Financial Market Supervisory Authority (Finma), has called for her regulatory agency to be given scope to mete out fines and impose punitive measures on errant managers.

Finma Director Urban Angehrn echoes the sentiment, saying «we have sharp instruments, we have no authority to issue fines,» in an interview with the «Tages-Anzeiger» (in German). Finma is limited in punishing individuals because the hurdles are very high, which is close to admitting it is really a dog that is all bark and no bite.

The realization by Finance Minister Karin Keller-Sutter that the «too big to fail» rule was unsuitable in Credit Suisse's case and would have led to enormous risks is also remarkable. The logical conclusion to be drawn is that new instruments are needed, which can have a more meaningful impact. That this is all the more urgent, considering the size of the mammoth «UBSuisse.»

Reflexive Recriminations

In addition to the reflexive accusations from one camp, such as a call for regulation of the «irresponsible bonus knights,» people in Swiss politics are worried about the new size of UBS. Concerns about mitigating cluster risks and ensuring competition are issues that cross party lines.

Ideas percolate but are then quickly picked apart again with counterarguments. The FDP is calling for Credit Suisse's Swiss business to be hived off into an independent entity. Critics complain it would ultimately lead to a loss-making bank.

Election propaganda?

The bank of the Swiss postal service, Postfinance, with a full banking license, is seen as a possible counterweight to the banking behemoth. This is likely to face resistance from the 24 Cantonal banks and the 220 Swiss Raiffeisen banks, which would severely dilute their political influence.

In Bern, a special session is being planned, which all boils down to a parliamentary commission of inquiry (PUK) to deal with the Credit Suisse case. Whether responsibilities can be clarified and a pathway to reorganization be found is questionable at the very least.

It remains to be seen how serious and purposeful the current discussions will be, or whether they will merely serve as a means of posturing ahead of the upcoming elections in September.

Unstoppable Realignment

Regardless of politics, the reorganization of the Swiss banking landscape inevitably started with the «bang» on March 19. And it doesn't start with Finma or in the lobby of the Federal Palace in Bern but rather finds its starting point in the minds of customers and companies who will decide with whom they want to conduct their financial business in the future.