Finance and Economics APP noticed that Martin Schlegel, the new head of the Swiss central bank, will take office this Tuesday, but there is still no consensus on how the bank will handle the bankruptcy of Credit Suisse and its acquisition by UBS Group.

Schlegel, the current Vice Chairman of the Swiss central bank, has been a close assistant to Thomas Jordan, the long-term head of the Swiss central bank. On Tuesday, he will be involved in the parliament's investigation into how Swiss authorities handle the collapse of Credit Suisse, with the investigation results expected to be announced in the coming weeks.

A report in the Swiss media in July implied that a secret parliamentary committee in charge of the investigation will criticize the Finance Ministry, the financial market regulatory agency FINMA, and the Swiss central bank for their handling of the events leading to the collapse of Switzerland's second-largest bank last year.

Former Deputy Governor of the Bank of England, Paul Tucker, wrote in a report submitted to the Swiss Finance Ministry at the end of 2023, "The fact is that the Swiss authorities were unprepared to prevent or contain the company's disintegration, which is regrettable."

The Swiss government, the Swiss central bank, and the country's regulatory authorities intervened in March 2023 to help the 167-year-old institution merge with UBS, following a series of financial setbacks and significant outflows of funds from Credit Suisse in the preceding months.

Some Swiss economists and business leaders have suggested that the Swiss central bank did not do enough, responded too slowly to the evolving crisis, and was too rigid in providing emergency funding, merely hoping that Credit Suisse would rescue itself.

"The disaster at UBS Group Switzerland reveals that Swiss authorities, including the Swiss National Bank, were not adequately prepared for the upcoming crisis," said Yvan Lengwiler of the University of Basel. He is a member of the Swiss National Bank Observation Group studying the Swiss National Bank.

"On the one hand, this is an incentive to do better in the future, but it also raises doubts about how the financial system would perform if UBS Group found itself in a similar situation."

Has the new CEO made any changes?

According to insiders, Jordan led the Swiss National Bank's response to the Swiss Credit bankruptcy, meeting with government ministers and bankers during 2022.

Jordan and Schlegel worked together to provide emergency liquidity of billions of Swiss francs, first to keep Credit Suisse alive and then to ease UBS's acquisition of it.

In July this year, Jordan accused Credit Suisse's management of being responsible for the bank's collapse and stated that Swiss authorities' actions prevented a global financial crisis.

Schlegel defended the Swiss National Bank's actions, particularly opposing calls to nationalize Credit Suisse, while the Swiss National Bank highlighted a series of lessons to be learned.

One key task for the new CEO, responsible for banking stability at the Swiss National Bank's governing council, will be to assist in formulating regulatory requirements, including stricter capital rules envisaged for the expanded UBS, although the government and parliament will have the final say.

Last week, he stated in an interview: "We are closely cooperating with the government and FINMA to propose good measures." "Learning is very important ... drawing correct conclusions, and proposing correct measures."

Despite lingering issues in banking industry regulation, the Swiss National Bank has won praise for controlling inflation. Last month, the inflation rate of the Swiss National Bank dropped to 1.1%.

EFG bank's Chief Economist Stefan Gerlach stated that maintaining the central bank's good record in monetary policy will be the focus of the new Swiss National Bank chairman, although Jordan will be "a difficult act to follow" in terms of monetary policy.

"Schlegel grew up in the Swiss National Bank, so I do not expect any changes, at least not initially," said Thomas Stucki, Chief Investment Officer of St Galler Kantonalbank and former head of asset management at the Swiss National Bank.

As Switzerland tries to emerge from the Credit Suisse crisis, it seems unlikely that Schlegel will try to differentiate himself significantly from Jordan.

When asked if his approach differs from his predecessor, Schlegel stated: "I think the important question is, what is the same." "And 'constancy' will be the central bank's mission and focus on price stability."