Former Coop Bank CEO faces three-year ban

The Swiss Financial Supervisory Authority (FINMA) has banned former Coop Bank CEO Andreas Waespi from any managerial role for three years after it was found he manipulated share prices at the bank.

Former Coop Bank CEO faces three-year ban
FINMA found irregularities at the bank. Photo: Coop Bank

On Wednesday FINMA imposed special conditions on Coop Bank after an investigation of market conduct at a number of banks found “significant irregularities” at Coop, FINMA spokesperson Tobias Lux said in a statement.

“Enforcement proceedings initiated against the Coop Bank in March 2014 concluded that the bank inadmissibly propped up the market price of its own shares from the summer of 2009 to the spring of 2013.

“The bank's actions constituted a serious violation of the ban on market manipulation under supervisory law.”

FINMA said the bank, led at the time by 53-year-old Waespi, bought its own securities in order to counteract a fall in price.

“In particular, before and during the publication of business results, as well as at month and year-end, the bank propped up the exchange price of bearer shares.”

It added: “Neither the Coop Bank nor its staff made any personal financial gains through these actions.”

As well as imposing special conditions on the bank, FINMA has commenced separate proceedings against Waespi “who was mainly responsible for the market manipulation.”

The former CEO is banned from a management role for three years.

The decision has dire consequences for Aargau Cantonal Bank (AKB) which last July appointed Waespi as its new director to succeed Rudolf Dellenbach on his retirement in April 2015.

In a statement, AKB said: "The board of directors of the Aargau Cantonal Bank regrets the unexpected consequence of this development”.

The bank has now cancelled its contract with Waespi “by mutual agreement,” said the statement.

Dellenbach will now continue in office until a new successor has been found.

According to broadcaster SRF, Waespi informed AKB about FINMA’s  investigation of Coop Bank, which started two months after Waespi applied for the new job, but those interviewing him thought it unlikely that proceedings would be initiated against him.

“We were of the opinion that it was very unlikely that Mr Waespi would receive a ban,” AKB President Dieter Egloff told SRF.

In a statement reported by SRF, Waespi said he was considering an appeal against the ban which he called “incomprehensible.”

In a further twist, newspaper Blick reported on Thursday that the disgraced Coop CEO was going to draw a salary from AKB of 690,000 francs, far exceeding a 600,000 franc wage cap imposed by the bank in 2012.

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Is it easy for a foreign resident get a loan in Switzerland?

When it comes to borrowing money from a Swiss bank, nationality may play a role in some cases, but not in others. This is what you should know about this process.

Is it easy for a foreign resident get a loan in Switzerland?
Getting a losn in Switzerland is subject to many conditions. Photo by Claudio Schwarz/Unsplash

Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.

It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.

As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy.

Whether or not a foreign national can borrow money from a bank depends on their permanent place of residence and permit status.

As a rule, Swiss lenders don’t give loans to non-residents. So if you reside abroad, there is practically no chance that a bank in Switzerland will lend you money.

However, some financial institutions make exceptions for cross-border workers. If you fall under this category, you can use this interactive tool, select “ Permit G” under “Residence Permit” and see what, if any, options, there are.

READ MORE: EXPLAINED: What cross-border workers should know about taxation in Switzerland

If you are a foreign national but have a permanent residence status (Permit C), your chances of getting a loan are practically the same as those of Swiss citizens — provided, of course, that you meet all the requirements set by lenders (see below).

What about other permit holders?

If you have a B Permit, you might be approved for a loan, depending on how long you have had this permit — obviously, the longer the better.

However, “you may be offered a higher interest rate or a limited loan amount. This is because of the statistically higher probability that you will return to your home country. Some lenders require the loan to be repaid by the time the B permit expires”, according to consumer comparison site 

Holders of other, temporary or conditional permits are not accepted.

What conditions — other than residence permit — should you fill to be considered for a loan?

You must be at least 18 years of age, though additional restrictions may apply to applicants under 25 — for instance, a higher interest rate or a limited loan amount. That’s because “lenders are generally more cautious with young applicants as their financial circumstances are usually less settled and the risk of default is deemed to be higher,” Comparis noted.

The same cautious approach applies to pensioners, especially those who have no regular income. The social security payments (AHV/AVS) do not count as income for the purpose of the loan.

There is also other eligibility criteria, based on employment status and salary. People with a regular income have a higher chance of obtaining a loan than those who are self-employed, temporarily employed, work on hourly basis or, logically, unemployed.

Other factors, including your existing debts, are also taken into account in the decision process.

Basically, lenders favour applicants with a stable income and good financial standing, in much the same way as supplemental health insurance carriers prefer young and healthy people.

Keep in mind that if your loan application is rejected, this will be recorded in the database of the  Central Office for Credit Information, making it more difficult, though not impossible, to get a loan in the future.

READ ALSO: Does having a good credit score matter in Switzerland?

The same rules do not apply to American citizens

That’s because Swiss and European banks are subjected to US demands to disclose the assets of Americans overseas in order to prevent tax evasion.

As adherence to these requirements is a major headache for the banks and in some cases also violates their country’s privacy laws, financial institutions prefer not to deal with Americans at all, even those who are permanent residents.

If you are a US citizen who also has Swiss nationality, you may have an easier time of it, but could still face hurdles in obtaining loans and other banking services.

There is no immediate relief in sight, although many organisations representing Americans abroad are lobbying in Washington to change the existing legislation.

READ ALSO: Why are Americans being turned away from Swiss banks?