This article examines the proposal to grant Swiss Financial Market Supervisory Authority (FINMA) the power to impose fines. The initiative, once seen as unlikely, gained renewed attention after the collapse of Credit Suisse and has since been supported by FINMA and considered by the Federal Council and the Swiss Parliament. While proponents emphasise deterrence, international credibility, and enhanced accountability, critics point to limited effectiveness, potential conflicts with the nemo tenetur principle, and risks to FINMA’s cooperative supervisory model. The article concludes that, if introduced, fining powers should be narrowly circumscribed and confined to legal entities.
1) Introduction
Swiss Financial Market Supervisory Authority (FINMA) currently has at its disposal a broad range of supervisory and enforcement measures of prudential nature, but no competence to impose fines. The question of whether it should be granted the power to impose fines has been debated for years. Long regarded as a politically unlikely reform, the proposal has re-emerged with renewed urgency in the aftermath of the collapse of Credit Suisse in March 2023.
The power to impose fines should supplement FINMA’s current supervisory instruments without impairing the duty of cooperation incumbent upon supervised entities and individuals. FINMA itself has emphasised that supervised entities must continue to fulfil their cooperation obligations in establishing the relevant facts, thereby enabling irregularities to be identified without delay and the necessary measures to be imposed.1
Supporters of a new fining regime encounter opposition from those advocating caution and criticising the introduction of FINMA’s power to impose fines.
2) The Current Legal Framework
Under the Financial Market Supervision Act (FINMASA), FINMA currently has at its disposal a broad range of supervisory and enforcement measures. These include measures to restore compliance (Article 31 FINMASA), declaratory rulings (Article 32 FINMASA), industry bans and prohibitions on professional activity (Articles 33 and 33a FINMASA), publication of rulings (Article 34 FINMASA), confiscation of unlawfully obtained profits (Article 35 FINMASA), and withdrawal of licences (Article 37 FINMASA).2 These measures are predominantly prudential in nature. Their purpose is not punitive but corrective, namely, to restore compliance, safeguard financial stability, and protect the reputation of the Swiss financial market.
According to the Federal Supreme Court, profit confiscation and industry bans do not qualify as “criminal charges” within the meaning of Article 6 of the European Convention on Human Rights (ECHR).3 FINMA may therefore apply them in administrative proceedings without being subject to the full set of criminal procedural guarantees, such as the presumption of innocence or the privilege against self-incrimination (nemo tenetur principle).
Unlike supervisory authorities in the European Union, the United States, or the United Kingdom, FINMA currently lacks the power to impose fines on supervised institutions and individuals for breaches of supervisory law or other irregularities.4 Criminal prosecution of misconduct in the financial sector – and thus the power to impose fines or other criminal sanctions – falls within the jurisdiction of other authorities, such as (1) the Criminal Law Division of the Federal Department of Finance, which is responsible for the prosecution of violations of the criminal provisions of FINMASA and other financial market acts, (2) the State Secretariat for Economic Affairs SECO, which is responsible for prosecuting sanctions violations, (3) the Competition Commission, and (4) the federal and cantonal prosecution offices.
This allocation of responsibilities – prudential supervision and enforcement by FINMA on the one hand, and punitive sanctioning by the criminal authorities and administrative penal authorities on the other – has long been regarded as a defining feature of the Swiss financial market regulatory framework.
3) Political Developments
a) Parliamentary Initiatives
In 2021, the Swiss Parliament advanced several initiatives on individual accountability and supervisory sanctions. Two are particularly noteworthy: One postulate, which requested an examination of measures to strengthen the personal responsibility of senior financial-market managers, and a second postulate, which called on the Federal Council to assess whether FINMA should be empowered to impose fines and other sanctions. The Federal Council proposed acceptance of the first postulate, but recommended rejection of the second postulate. The National Council nevertheless approved both postulates.5
In parallel, the Federal Council published in February 2022 its report on financial administrative sanctions.6 The report examined whether FINMA or other administrative authorities could be granted the power to impose fines within the framework of Swiss administrative law. It concluded that such sanctions could, in principle, be introduced on a statutory basis, provided the legislator clearly defines their scope, the addressees, and the maximum amounts in order to comply with the constitutional principle of legality. The Federal Council observed that financial administrative sanctions could be designed in conformity with the guarantees of both the Federal Constitution and the ECHR. At the same time, it emphasised that the characterisation of such sanctions as “criminal” in the autonomous sense of Article 6 ECHR would require compliance with the core fair-trial guarantees set out therein. In particular, the essential rights of defence would have to be safeguarded – including the presumption of innocence, the privilege against self-incrimination (nemo tenetur principle), the right to legal representation, and the right to effective judicial review.
b) The Credit Suisse Collapse as Catalyst
The takeover of Credit Suisse by UBS in March 2023 brought renewed attention to the question of whether FINMA should be vested with the power to impose fines.7 In light of the ensuing public and political debate, FINMA explicitly called for the introduction of such authority. In its December 2023 Lessons Learned from the Credit Suisse Crisis report, it reiterated this demand, presenting fines as a necessary complement to its existing supervisory instruments.8 FINMA reaffirmed its position in June 2025 with the publication of its information sheet on the extension of its supervisory toolkit, again stressing the need for a statutory power to impose fines as part of a broader reinforcement of supervisory measures. Notably, FINMA’s newest request was now expressly limited to the imposition of fines on legal entities, not on individuals.9
The Federal Council addressed these issues in its 2024 Banking Stability Report. While it endorsed the introduction of fines against supervised legal entities, it explicitly rejected their extension to individuals, citing constitutional concerns as well as the practical consideration that any personal exposure would likely be offset through higher risk premiums in remuneration or contractual agreements to assume the fines.10 The Swiss Parliament, by contrast, has consistently pressed for a broader approach. In 2025, following the report of the Parliamentary Investigation Commission on the Credit Suisse crisis, both the National Council and the Council of States adopted motions requesting that the introduction of FINMA’s power to impose fines be examined not only with respect to systemically important banks (SIBs) but also with regard to responsible individuals.11
4) Arguments in Favour of the Power to Impose Fines
The following arguments are invoked to justify granting FINMA the power to impose fines:
– Deterrent and signalling function: FINMA has argued that fines have a noticeable impact on the earnings of the financial institution concerned and thereby exert a disciplinary effect. According to FINMA, fines also send a signal to the public that supervisory rules have been breached. Their deterrent effect thus extends beyond the sanctioned institution and influences the behaviour of other market participants.12
– International credibility and peer reviews: Switzerland has repeatedly been criticised in peer reviews by the Financial Action Task Force (FATF) and the International Monetary Fund (IMF) for the absence of any FINMA power to impose fines.13 Aligning with international practice would enhance the reputation of the Swiss financial centre and demonstrate a willingness to address perceived enforcement gaps.14
– Shareholder leverage and governance effects: The Federal Council has noted that fines may provide leverage for shareholders, for example by prompting them to withhold discharge of the board or initiate legal action against management.15
– Complement to prudential measures: Fines would not replace existing supervisory instruments but rather complement them. They could add a punitive dimension to an enforcement framework otherwise focused on remediation and restoration. FINMA has repeatedly highlighted that fines would complete its “toolbox” and thereby enhance the consistency and credibility of its enforcement policy.16
– Strengthening FINMA’s reputation at national level: Finally, visible financial sanctions are viewed as a means of reinforcing public confidence in FINMA’s supervision.17 There is broad recognition that restoring trust requires not only effective prudential oversight but also credible and transparent accountability mechanisms.
5) Arguments Against the Power to Impose Fines
The following arguments are invoked against granting FINMA the power to impose fines:
– Questionable effectiveness: It is doubtful whether fines imposed on institutions would meaningfully alter behaviour. As FINMA itself once acknowledged in earlier communications, the prevailing corporate attitude toward fines often amounts to “pronounced today, paid tomorrow, forgotten the day after tomorrow.”18 For larger banks, fines are easily absorbed as routine operating costs and thus fail to induce sustained behavioural change. Empirically, reputational effects of fines are typically short-lived, especially for institutions considered “too big to fail.”19
– Stronger reliance on existing instruments: FINMA already possesses powerful and intrusive measures that, when properly applied, are often more effective than financial sanctions. These include measures to restore compliance – such as the forced removal of senior managers or restrictions on specific business activities –, industry bans, publication of rulings, and the confiscation of profits. Unlike fines imposed on financial institutions, these instruments directly target decision-makers and governance structures, thereby addressing the root causes of breaches of supervisory law or other misconduct. From this perspective, fines could ultimately prove redundant or inferior to tools already available to FINMA.20
– Procedural complications and efficiency concerns: The introduction of fines would inevitably trigger the application of criminal-law guarantees under Article 6 ECHR, including the presumption of innocence, the privilege against self-incrimination (nemo tenetur principle), the right to legal representation, and the right to effective judicial review. This would require significant adaptations of FINMA’s supervision and enforcement procedures, the allocation of additional resources, and possibly a restructuring of internal processes. These shifts would compromise one of FINMA’s key strengths – its ability to act swiftly and pragmatically in crisis situations – by replacing cooperative oversight with formalised, adversarial processes.21 In a recent decision, the Federal Supreme Court confirmed that the duty to cooperate in administrative law does not override the nemo tenetur principle when there is a risk of self-incrimination.22
– Risk of role confusion: Transforming FINMA into a quasi-criminal authority risks blurring the established separation between prudential supervision and punitive sanctioning. FINMA’s legitimacy has long rested on a cooperative supervisory model based on dialogue and corrective intervention rather than confrontation. Expanding its mandate to include fines could erode this trust-based approach, reduce the willingness of institutions to cooperate fully and proactively, and thereby weaken overall supervisory effectiveness. This chilling effect would be even more pronounced if fines could be imposed not only on financial institutions but also on individuals.23
– Loss of supervisory focus: There is a risk that FINMA could resort to imposing fines rather than ordering the personnel and organisational measures that supervisory law considers essential to restoring compliance. Such an approach would undermine the supervisory framework, as FINMA’s primary statutory mandate is to supervise and ensure stability, and not to punish.24
– Misallocation of costs and fairness concerns: Fines imposed on financial institutions ultimately fall on the shareholders, including pension funds and retail investors, who are typically uninvolved in the misconduct. Culpable managers, by contrast, may remain unaffected. This misalignment undermines both deterrence and fairness.25 More targeted instruments – such as remuneration clawbacks, malus provisions, or a senior managers regime – are therefore considered more appropriate to ensure that responsibility rests with those actually accountable for breaches of supervisory law or other misconduct.26
– Systemic risk considerations: The imposition of substantial fines on SIBs could even exacerbate financial instability by weakening their capital base at critical moments. From this perspective, the Swiss legislator should avoid sanctions that may impair the resilience of the very institutions they are tasked with safeguarding.
– Comparative perspective: While fines are common in the European Union, the United States, and the United Kingdom, these jurisdictions also face recurring debates about whether fines are truly effective in changing corporate culture. Empirical studies suggest that repeated fines, particularly in the United States, have not prevented misconduct at large financial institutions.27 Therefore, the Swiss legislator should be cautious in importing an instrument of questionable efficacy.
6) Conclusion
Given the political and public pressure, together with FINMA’s repeated calls for the power to impose fines after the Credit Suisse collapse, the introduction of such authority has become a realistic prospect – at least for financial institutions, and in particular for SIBs.
While the introduction of FINMA’s power to impose fines would respond to longstanding criticism from international bodies such as the FATF and the IMF and resonate with political and public opinion, their practical utility and effectiveness should be assessed with caution. Experience in other jurisdictions, notably the United States, shows that even substantial fines imposed on large financial institutions have had only limited long-term impact on corporate behaviour. That said, the power to impose fines could provide some additional deterrent effect and may be viewed as a useful complement to the measures already available to FINMA, which – when properly applied – also provide strong corrective and preventive effects.
To take account of legitimate concerns, any new fining regime would need to be carefully designed and narrowly circumscribed so as not to compromise the efficiency and effectiveness of FINMA’s supervisory and enforcement activities. In light of the recent decision of the Federal Supreme Court,28 which reaffirmed that the nemo tenetur principle must be fully respected whenever punitive sanctions are at stake, the power to impose fines should be explicitly confined to legal entities and not extended to individuals, as the Federal Council has proposed. Limiting fines to the institutional level would reduce the risk that cooperation with FINMA is unduly impaired by the assertion of the privilege against self-incrimination (nemo tenetur principle).
It is also worth considering whether FINMA’s power to impose fines should be further modelled on Article 102(1) Swiss Criminal Code, thereby restricting fines to cases where breaches of supervisory law or misconduct cannot be attributed to a specific individual due to organisational deficiencies within the institution. Combined with the introduction of a senior managers regime, as likewise proposed by the Federal Council, such a framework would encourage financial institutions to ensure that responsibilities are clearly allocated, documented, and fulfilled, thereby enabling accountability for breaches or for misconduct to be effectively attributed.
Claudio Bazzani (claudio.bazzani@homburger.ch)
Reto Ferrari-Visca (reto.ferrari-visca@homburger.ch)
1 FINMA, Informationsblatt vom Juni 2025, Erweiterung des FINMA-Instrumentariums: Bussen.
2 Cf. Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 276 et seq.
3 Cf. BGE 139 II 279 on profit confiscation; BGE 142 II 243 on industry bans.
4 Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 276.
5 Postulat Andrey (21.3893), Schlanke Werkzeuge, um höchste Finanzmarktkader besser in die Pflicht zu nehmen, and Postulat Birrer-Heimo (21.4628), Wirksame Sanktionen der Finma gegen fehlbare Finanzinstitute.
6 Bundesrat, Bericht Pekuniäre Verwaltungssanktionen vom 23. Februar 2022, BBl 2022 776 ff.
7 Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 277.
8 FINMA, Bericht vom 19. Dezember 202, Lessons Learned aus der CS-Krise, p. 8, 46, 50 and 57.
9 FINMA, Informationsblatt vom Juni 2025, Erweiterung des FINMA-Instrumentariums: Bussen.
10 Bundesrat, Bericht vom 10. April 2024, Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 283 et seq.
11 Motion Z’Graggen (24.4527), Durchsetzungskraft der Finma bei SIB stärken; Motion Ryser (24.4531), Durchsetzungskraft der Finma bei SIB stärken. Cf. Bundesrat, Stellungnahme vom 20. Dezember 2024 zum PUKBericht zur Credit Suisse-Krise, p. 34.
12 FINMA, Informationsblatt vom Juni 2025, Erweiterung des FINMA-Instrumentariums: Bussen. Cf. Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 282.
13 Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 277.
14 Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 282.
15 Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 282.
16 FINMA, Informationsblatt vom Juni 2025, Erweiterung des FINMA-Instrumentariums: Bussen. Cf. Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 282.
17 Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 282.
18 Zulauf, New instruments for FINMA – 11 FINMA power to impose fines?, N 8.
19 Cf. Daeniker, Ein voll haftender Bankmanager ist der falsche Ansatz , in: BILANZ, September 19, 2024; Reiser, Verfügt die FINMA über genügend wirksame und scharfe Instrumente gegen (höchste) Bankmanager?, in: SZW 2024, p. 96 ets eq.; Wyss, FINMA-Bussenkompetenz – ein wirksames Mittel zur Abschreckung?, in: GesKR 2024, p. 145; Zulauf, New instruments for FINMA – 11 FINMA power to impose fines?, N 26 et seq., N 34 and N 42.
20 Cf. Reiser, Verfügt die FINMA über genügend wirksame und scharfe Instrumente gegen (höchste) Bankmanager?, in: SZW 2024, p. 96; Zulauf, New instruments for FINMA – 11 FINMA power to impose fines?, N 15 et seq. and N 32 et seq.
21 Cf. Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 283 et seq.; Reiser, Verfügt die FINMA über genügend wirksame und scharfe Instrumente gegen (höchste) Bankmanager?, in: SZW 2024, p. 96; Wyss, FINMA-Bussenkompetenz – ein wirksames Mittel zur Abschreckung?, in: GesKR 2024, p. 146 und p. 152 et seq.; Zulauf, New instruments for FINMA – 11 FINMA power to impose fines?, N 37 et seq.
22 Decision of the Swiss Federal Supreme Court 7B_45/2022 of 21 July 2025.
23 Cf. Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 283 et seq.; Wyss, FINMA-Bussenkompetenz – ein wirksames Mittel zur Abschreckung?, in: GesKR 2024, p. 129 et seq. and p. 145; Zulauf, New instruments for FINMA – 11 FINMA power to impose fines?, N 35 et seq.
24 Cf. Zulauf, New instruments for FINMA – 11 FINMA power to impose fines?, N 35 et seq.
25 Cf. Bundesrat, Bericht vom 10. April 2024 zu Bankenstabilität einschliesslich Evaluation gemäss Artikel 52 des Bankengesetzes, p. 283.
26 Cf. Wyss, FINMA-Bussenkompetenz – ein wirksames Mittel zur Abschreckung?, in: GesKR 2024, p. 145; Zulauf, New instruments for FINMA – 11 FINMA power to impose fines?, N 26 et seq., N 34 and N 42.
27 Cf. Wyss, FINMA-Bussenkompetenz – ein wirksames Mittel zur Abschreckung?, in: GesKR 2024, p. 145; Zulauf, New instruments for FINMA – 11 FINMA power to impose fines?, N 26 et seq., N 34 and N 42.
28 Decision of the Swiss Federal Supreme Court 7B_45/2022 of 21 July 2025.