In a bold move, Switzerland’s lower house of parliament has overwhelmingly approved a proposal to mandate the return of a portion of senior bank executives’ income over the past decade if the bank requires a government bailout.
The motion, which still awaits discussion in the upper house, emerges a year after Switzerland injected billions of dollars in emergency funding to support troubled Swiss bank Credit Suisse, eventually leading to its acquisition by competitor UBS.
Under the proposal, if a systematically important bank receives a government rescue, its top management would be required to refund 50% of their regular compensation, including bonuses, received over the previous ten years.
“The Federal Council (government) is called upon to take measures to hold the top management of systemically important banks more accountable,” asserts the motion, spearheaded by a member of the right-wing Swiss People’s Party (SVP).
The motion explicitly references the 2023 Credit Suisse case and the 2008 bailout of UBS during the global financial crisis, underlining the need for increased executive accountability in such scenarios.
The measure garnered significant support, with 120 votes in favor, 55 against, and 18 abstentions recorded in the official tally.
Despite the motion’s backing, the Swiss government, slated to unveil its own recommendations on managing banks deemed “too big to fail,” has recommended rejecting the proposal.
