Finma has concluded its investigation into Raiffeisen Switzerland and officially declared the bank’s handling of conflicts of interest ‘inadequate’.
A press release from Finma mentioned Pierin Vincenz, Raiffeisen Switzerland’s ex-CEO, who was released from jail just days ago after spending 106 days in custody.
It read: ‘Raiffeisen’s board of directors failed to adequately supervise its former CEO, thereby enabling him, at least potentially, to generate personal financial gain at the bank’s expense. Overall, Finma finds that there was a serious breach of supervisory law.’
Finma launched its investigation in 2016 following indications of potential conflicts of interest.
According to the regulatory watchdog, Raiffeisen Switzerland had built up a large number of shareholdings, which sometimes meant the bank was simultaneously a shareholder, business partner and creditor of companies. They also acted as part of the board of directors.
While shareholding in and of themselves are not an issue, Finma said the bank should have put stricter monitoring practices in place to spot conflicts of interest.
Finma said Raiffeisen Switzerland has now initiated a range of changes to improve its regulatory compliance.
Finma has also decided that the bank needs ‘fresh blood’. Now the board of directors must have at least two members with experience working for a similarly sized bank, as well as at least one member with recognized compliance experience.
Decisions on whether Finma will launch further proceedings against individuals remain delayed until the bank’s internal investigation results become available.