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No matter how hard the screws are tightened, and with the strictest capital ratios in the world, no bank is safe from going bust as Credit Suisse's demise vividly demonstrated. It collapsed not because of insufficient capital, but because confidence in the strategy developed by the board of directors and in the operational skills of management was lost.

The bitter truth for a market economy is that a failure is an option and sometimes a necessary outcome for thriving innovation and prosperity.

Sweeping Denunciations

In addition to the regulation debate, the special session was characterized by populist undertones, with malice at times being heaped on an entire profession. Sweeping attacks are likely to have unjustly hurt at least some of the many thousands of Credit Suisse and UBS employees.

Until proven otherwise, conscientious employees in the trenches like requirements engineers specializing in asset management applications and regulatory business analysts, do not have to answer for the entire debacle.

Still, they are put in the barrel with the bad apples and now too must endure ridicule. One might be tempted to think the profession as a whole can emerge humbled from these trying times and realize that serious bankers should not be above society but amidst it. As some are incapable of self-reflection, it remains to be seen if this transpires.

Reaping the Whirlwind

Bank managers who collected huge bonuses despite misconduct were rightly castigated. Bank boards failing to recognize the signs after the government bailout of UBS in 2008, and sticking to a toxic bonus culture further sowed the seeds of discontent. They are now reaping a whirlwind as anger and resentment grow.

Now that the mismanaged Credit Suisse had to be rescued with state tax guarantees, even politicians previously supportive of banks can no longer tolerate this self-serving mentality with a clear conscience. After myriad management failures of banks politicians must now ensure, by capping bonuses for one, that false incentives are eliminated and losses are also borne by managers.

Avoid Quick Fixes

Despite all the criticism in recent days, whether justified or not, politicians should keep their cool and beware of scattershot legislation resulting in a «Lex UBS». Otherwise, in addition to the loss of a second major bank, the Swiss financial center, which is particularly characterized by system stability, will be relegated from the top league.