GENEVA, April 25, 2008 (AFP) – Banks should reform their pay structure in the wake of the subprime crisis to avoid encouraging traders to take reckless risks, a top Swiss central banker said on Friday. Jean-Pierre Roth, chairman of the Swiss National Bank’s governing board, said a rethink of corporate governance and strengthening of rules was vital to maintain the reputation of Switzerland’s financial centre.
“For a financial centre like ours – which includes international banks whose private banking arms generate substantial revenue and consequently rely on having a spotless reputation – such action is vital,” Roth said in a speech at the centenary celebrations of the SNB.
Roth’s remarks came a day after the country’s second-biggest bank Credit Suisse plunged into a loss as it had to write down billions in the first quarter owing to its exposure linked to the ongoing subprime crisis in the United States.
Two days ago, the country’s biggest bank UBS also held a stormy annual general meeting at which some small shareholders took the podium to denounce the management over the bank’s massive writedowns of over 37 billion dollars.
Due to the significance of the banking sector to Switzerl