Basler Kantonalbank said on Friday that Chairman Andreas Albrecht is to step down by the end of 2013 after the institution was criticised by the Swiss financial regulator for rigging sales of its own participation certificates.This content was published on November 29, 2013 - 11:06
In a statement the cantonal bank said Albrecht was resigning to protect the bank from a “loss of confidence” after the Swiss Financial Market Supervisory Authority (FINMA) ordered the bank on November 21 to pay back CHF2.6 million ($2.9 million) in profits earned by propping up the price of its own certificates.
The local government-backed bank said it regretted Albrecht’s resignation. But it admitted it could have acted faster to clean up what the Swiss regulator termed "significant irregularities" in trading of the bank's certificates between 2009 and 2012.
This is the latest in a series of scandals for Basler Kantonalbank, which is among 14 Swiss banks under criminal investigation by the US Department of Justice for allegedly helping wealthy Americans evade taxes.
The bank's CEO, Hans Rudolf Matter, also resigned in October 2012 after the bank said 620 clients lost more than CHF100 million in a scandal involving foreign exchange investment firm ASE.
There are 24 cantonal banks in Switzerland; the cantons either own the bank outright or are the majority stakeholder.
Cantonal banks were founded in the second half of the 19th century. Historically, the role of these banks was to strengthen and support the local economy through the provision of low-cost loans. Today they offer an extensive range of products and services. Their main areas of business are loans to small and medium-sized companies and retail banking, particularly mortgages.
They account for approximately 30% of the total assets of all Swiss-domiciled banks and employ nearly 19,000 people. Basler Kantonalbank is one of the largest cantonal banks, with CHF40 billion in total assets as of the end of 2012.
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