Birgit Rutishauser has finally reached the top of Switzerland's financial regulator after she was passed over last time. The pressure on her - and Finma - is higher now than ever.

It all simply became too much for Urban Angehrn. The unyielding, constant pressure had started to take a toll on his health, he maintained on Wednesday when commenting on the surprising decision to resign as head of the Swiss Financial Market Supervisory Authority (Finma) in September. According to him, making the decision was extremely difficult but reasonable given the circumstances.

Angehrn is going but the Credit Suisse crisis remains. In fact, the regulator dryly called it «the biggest challenge in Finma's history» in the very same announcement. Finma had been intensively preparing for the forced sale of Switzerland's second-largest bank since last autumn and the deal is still likely to result in any number of unexpected and unforeseeable consequences.

Insurance Expert

The regulator is being forced to do a great deal of soul-searching right now. Some might even say it is tantamount to unhealthy navel-gazing. Among other things, it has to fight off a complaint from foreign investors in the Federal Administrative Court in St. Gallen over the write-off it ordered in Credit Suisse's AT1 bonds.

This is all now on Birgit Rutishauser's plate as interim director. But she, like Angehrn, is not really a big bank expert. Her area of specialty is insurance. In 2018, the ETH-trained mathematician was appointed head of the insurance section. A year later she was named then head Mark Branson's deputy.

Missed Pole Position

But Rutishauser was not appointed to the top spot two years later when Branson headed off the ostensibly greener pastures of German regulator BaFin. Bank specialist Jan Bloechliger was made interim director, after which Angehrn was poached from Zurich Insurance, where he headed the investment area.

Now Rutishauser is getting a second chance. She and Finma chairwoman Marlene Amstad build a strong female partnership at the top of the regulator, where they will have to face up against the testosterone-heavy duo of UBS chairman Colm Kelleher and CEO Sergio Ermotti. If nothing else, it is going to be interesting to watch.

Competition Concerns

There is clearly going to be no honeymoon for the interim director. According to media reports, the Swiss Competition Commission is going to release a report on the impact of the large-scale acquisition on the domestic banking market. It will then be up to Finma to decide whether the new UBS is distorting internal markets too much or not.

That judgment is also going to set the tone related to how the regulator approaches the banking giant in the future. A report on banking stability commissioned by the government ended up being a pretty tame exercise. As a glaring example, the concrete demand for more equity was not among any of the requirements.

More Power

In any case, most experts are calling for Finma to be given more power, and it is something the regulator should take advantage of. Chairwoman Amstad has been calling for the regulator to be able to levy fines and name and shame difficult institutions and bankers clearly, Finma doesn't have these instruments yet and it is far behind other overseas regulators that do.

If Rutishauser is able to manage that with a well-considered and thought-out body of work in advance, she will be one for the ages in the Finma history books.