Swiss Opinion On Committees' UBS Report

by Ulrika Lomas, Tax-News.com, Brussels

19 October 2010

The Swiss Federal Council has announced its decision to implement concrete measures in response to various recommendations laid out in a May report submitted by the Control Committees (CCs) of the Federal Assembly entitled “The Swiss authorities under the pressure of the financial crisis and the disclosure of UBS customer data to the USA”. These measures include plans to strengthen the Confederation’s early detection mechanisms together with its systems of crisis management and strategic leadership, to improve the resilience of the financial system to future crises, and to put forward proposals to ensure collective responsibility of the governmental college.

During a recent meeting, the Swiss Federal Council adopted its opinion on the report. Thanking the CCs for their solid analysis and valuable contribution in reconstructing the events that unfolded at the time, the Federal Council acknowledged the importance of the issues raised in the report.

In their report, the CCs confirmed that the procedures followed by the Federal Council regarding the rescue of UBS were “adequate”, that they had been successfully implemented, and that they had even had a positive effect on the economic and financial stability of the country. In this respect, the CCs findings are in full agreement with the views of international organizations such as the International Monetary Fund and the Organization for Economic Cooperation and Development.

In its opinion, the Federal Council has taken a detailed position on the 19 recommendations and parliamentary interventions of the CCs, and has declared that it is in general agreement with the aims formulated in the report and that it is willing to accept the majority of the recommendations. According to the Federal Council, realizing these aims will take the form of concrete measures designed to strengthen the resilience of the country’s financial sector to future crises, notably by improving collaboration between financial sector stakeholders and by adapting existing regulations as regards own capital and liquidity.

In accordance with the recommendations outlined by the CCs in the report, the Federal Council has also announced its intention to adjust its early detection instruments to threats that could prove damaging to Swiss interests and to review the organization of its political and strategic leadership. The Federal Council has also decided to encourage the collaboration and coordination of the departments and the federal chancellery at different levels. To this end, the role of deputy heads of department and the role of Federal Council delegations will be redefined and the duties of the general secretaries expanded.

In a few instances, the Federal Council has taken note of the recommendations contained in the report, although has proposed alternative solutions. For example, while the Federal Council understands the CCs request that those responsible for certain leading UBS bodies be held accountable for their actions, it nevertheless considers that the measure proposed (that the Confederation assumes the risks associated with the trial and that it also bears the procedural costs linked to liability claims) is not in accordance with current law and would not serve to fulfil the objective.

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