Swiss lower house backs plan to claw back pay from rescued banks

By Thomson Reuters Mar 14, 2024 | 2:51 AM

ZURICH (Reuters) – Switzerland’s lower house of parliament late on Wednesday clearly passed a motion to make senior management of a major bank return half their income over the previous decade if the lender has to be rescued with public money.

The measure, which still needs to be debated in the upper house, comes a year after Switzerland provided billions of dollars in emergency liquidity to stricken Swiss bank Credit Suisse before it was taken over by its rival UBS.

According to the motion, if a systemically relevant bank is rescued by the government, its top management should pay back 50% of their regular pay and bonuses from the previous 10 years.

“The Federal Council (government) is called upon to take measures to hold the top management of systemically important banks more accountable,” the motion states.

The measure, which was put forward by a politician from the right-wing Swiss People’s Party (SVP), made explicit reference to the 2023 Credit Suisse case, as well as the 2008 rescue of UBS during the global financial crisis.

The measure passed with 120 votes in favor, 55 against, and 18 abstentions, an official tally showed.

The Swiss government, which is due to present its own report with recommendations on how to better cope with banks deemed too big to fail, has proposed rejecting the motion.

(Reporting by Dave Graham and Paul Arnold, editing by John Revill)