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Swiss Federal Banking Commission’s Circular on Internal Surveillance and Control: the
Swiss Bankers Association wants made-to-measure solutions and not blanket state regulation
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Basel, 3 August 2005 – The Swiss Bankers Association (SBA) rejects the
Swiss Federal Banking Commission’s draft Circular on Internal Surveillance and Control. Although the
SBA in principle supports the goals of the Circular and considers the planned contents to be partly
correct, it believes the areas in question – many of which are in any case already the subject of banks’
internal regulations – should be addressed with made-to-measure solutions (e.g. self-regulation or internal
bank regulations) and not with undifferentiated blanket state regulation. Many areas have already been
covered by the SBA’s Directives on Internal Control (issued in 2002). The SBA rejects on principle the
“whistle blowing” clause that has been put forward.
The Swiss Bankers
Association says in a Position Paper that it rejects the Swiss Federal Banking Commission (SFBC)’s draft
Circular on Internal Surveillance and Control. While the SBA does in principle support the goals the
SFBC is trying to achieve with its Circular and also some of the planned contents, it nevertheless believes
that no new state regulation is needed because many of the Circular’s planned provisions are already
in force in many banks as a result of the SBA’s “Directives on Internal Control” issued in June 2002.
These self-regulatory directives were later accepted by the SFBC as part of the body of bank regulation
that banks are legally obliged to conform with and they have proven their worth. The SBA suggests that
any supplementary and meaningful regulation on the subject should be done through a revision of the
SBA’s own self-regulatory directives. The banks should, however, be given enough leeway to come up with
their own made-to-measure internal solutions that follow given principles.
The
SBA rejects on principle the new “whistle blowing“ clause that has been put forward in the Circular.
In its proposed form the whistle blowing clause would radically change the internal culture of banks
as well as the atmosphere in the workplace. The SBA finds the SFBC’s argument that whistle blowing could
be an “early warning” system to be rather wobbly as there are today other and more effective methods
with which to control and manage risk.
Other points the SBA criticises
are planned regulations regarding the composition and independence of boards of directors as in the
SBA’s opinion this is already well covered by the Swiss Code of Obligations and no new regulations are
necessary. Finally, the draft Circular does not differentiate enough in its scope and it would not survive
a cost-benefit analysis if tested on individual cases.
Position paper [PDF 105KB] (in German only)
| Contacts |
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| Thomas Sutter |
James Nason |
| Head of Communications Switzerland |
Head of International Communications |
Swiss Bankers Association,
Basel |
Swiss Bankers Association,
Basel |
| Tel. +41 61 295 92 06 |
Tel. +41 61 295 92 15 |
| Fax +41 61 272 53 82 |
Fax +41 61 272 53 82 |
 www.swissbanking.org |
www.swissbanking.org |
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