SWITZERLAND - Eugen Haltiner, president of Switzerland's banking watchdog (EBK), has rejected the notion that regulation of Swiss pension funds (Pensionskassen) would be improved if it were immediately handed over by the EBK.
"The EBK's professionalism is limited to that area which we regulate: banking. If pension funds were made part of our brief, we wouldn't immediately have the know-how and would have to build that up," Haltiner told Switzerland's Neue Zürcher Zeitung.
How to improve pension fund regulation has been hotly debated in Switzerland since the Swissfirst affair last summer.
The scandal erupted when it appeared that at least seven pension funds made what appeared to be dubious trades with shares in Swissfirst bank in September 2005.
In keeping with Switzerland's tradition of devolution, Swiss Pensionskassen are currently regulated by the nation's states or cantons. The schemes also have supervisory boards.
But Haltiner's colleagues in the Swiss government including Ulrich Grete, president of the Social Security Fund and Swiss National Bank president Jean-Pierre Roth, believe that creating a national regulator for the Pensionskassen is the key to better supervision of them.
Grete, in fact, even said last summer that many who serve on the supervisory boards of Pensionskassen were "bunglers".
Haltiner did not rule out the idea of including Pensionskassen in national supervision, but said that the government should create a single supervisor for financial services called Finma first. "Before we can talk about any expansion of our brief, we should finish the Finma project," he told the NZZ.
By the start of 2009, the Swiss government plans to launch Finma, a merger of the EBK with the regulator for private insurance and that which guards against money laundering.
However, ASIP, the main political lobby for Swiss Pensionskassen, doubts that the government will ever create a national regulator for the schemes.
The Swissfirst affair led to the temporary arrest of Roland Rümmeli, the former head of investments at the Pensionskasse for Siemens. Siemens also has filed criminal charges against Rümmeli.
But local authorities have, so far, found no evidence of insider trading at most of the seven Pensionskassen previously connected with Swissfirst.