Swiss banking regulator resigns over losses caused by ‘perpetual stress’

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The head of Switzerland’s financial regulator has resigned, citing damage to his health from “constant stress levels”, months after orchestrating the Credit Suisse bailout by UBS.

Orban Ungern, who took over as CEO of Finma less than two years ago, played a pivotal role in negotiations over the most important bank merger since the financial crisis.

Fenma announced on Wednesday that he will step down from his post at the end of September.

Ungern said in a statement that the “enduringly high level of stress” on the job “had health consequences” for him.

“I have thought about my decision carefully and have now decided to step down,” the 58-year-old added.

Finma is being sued by Credit Suisse investors who lost billions of dollars after the regulator signed off on a move to clear $17 billion of the bonds as part of the takeover by UBS.

The measure was particularly controversial because Credit Suisse shareholders retained some value in return for their shares, upending the traditional investor hierarchy even though this was permitted under Swiss law.

Questions have also been raised about how Credit Suisse could have been allowed into such a precarious situation that it had to be bailed out by its longtime rival, prompting Ungern to publish a defense of the regulator in Swiss newspaper NZZ in July.

A report commissioned by the Swiss government on the collapse of Credit Suisse and published last week found that Finma was too weak to adequately handle banking crises.

The report, written by a panel of eight academics, bankers and former regulators, recommended giving Finma greater powers after concluding that it lacked power compared to its international peers and struggled to impose its will on the country’s banking sector.

The regulator has just 550 employees, compared to the thousands employed by other regulators such as the UK’s Financial Conduct Authority.

Ungern will be replaced as CEO by his deputy, Birgit Roteshauser, on an interim basis, effective October 1.

Venma said Ungern was instrumental in managing the Credit Suisse crisis, which it described as the “biggest challenge” in its history.

“During his tenure, Orban Ungern had to handle and be responsible for a wide range of tasks in a wide range of areas in addition to day-to-day business,” said Marlene Amstad, Chair of the Regulatory Authority.

Separately, the Swiss Federal Council — the country’s seven-member executive body — on Wednesday reappointed Finma’s current board for another three-year term, adding former Deutsche Bank CEO René Keller.

Ungern, who worked for 14 years at the Zurich insurance company and spent some of his early career at Credit Suisse, was widely liked among his international peers even as Swiss policymakers faced backlash over their decisions regarding the bank and their lack of consultation with other regulators. , especially the Financial Supervisory Authority. European Central Bank.

UBS last week reported a record $29 billion profit in the second quarter, driven almost entirely by an accounting gain from the Credit Suisse takeover. Shares of UBS have risen more than 30 per cent since the bailout was agreed.